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ForexLive Asia-Pacific FX news wrap: Australian headline CPI dips into target band (but …)

It
was another subdued session for major FX. Political
machinations in Japan to form the next government continue, and they did so
today against the backdrop of a quiet yen. USD/JPY has barely tracked
a 30 point range.

On
the data agenda were Australian inflation figures:

  • the
    Q3 headline rate came in at 2.8% y/y, below the top of the 2-3% RBA
    target band and its lowest since early 2021
  • the
    Q3 core ‘trimmed mean’ y/y came in at a still lofty 3.5%
  • interestingly,
    the y/y for September month came in at 2.1% – the monthly reads are
    not the ‘official’ CPI rate, but encouraging nonetheless

The
caveat to the low headline rate is that it benefitted from government
temporary rebates and subsidies (cost of living relief). These will
roll off and headline inflation is likely to pop back up again in the
quarters ahead.

The
data barely moved the needle on RBA rate cut expectations, many
analysts (not all) favour a February 2025 cut while market pricing is
looking to May 2025. AUD/USD didn’t move around much, a slight dip
and rally and since has lost ground to its session low, helped along
by a broader USD bid.

EUR,
NZD, CAD, GBP have all lost a little ground against the USD. There is
little fresh news flow.

This article was written by Eamonn Sheridan at www.forexlive.com.

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