AUDUSD Slips as Inflation Eases Below Forecasts

The AUD/USD stayed low at about $0.654 this Wednesday, marking its weakest point since the beginning of August. This drop follows recent inflation data that was weaker than many expected.

Australia’s Inflation Drops to 2.8% in Third Quarter

In the third quarter, Australia’s yearly inflation rate fell to 2.8%, a decrease from the 3.8% recorded in the prior quarter, and was slightly below the predicted 2.9%. This brings inflation within the 2%-3% range that the Reserve Bank of Australia (RBA) aims for. The inflation rates for the quarter and the month decreased more than expected.

• Also read: GBP/USD Nears $1.3 as BoE Rate Cut Expectations Shift

RBA Holds Off on Rate Cuts as Inflation Stays High

However, the trimmed mean CPI, the RBA’s preferred inflation gauge, was only slightly reduced to 3.5% in Q3, still exceeding the target range. The RBA has stated that the main inflation rate is too high for any immediate reduction in interest rates.

Market analysts predict that the RBA will keep interest rates steady at 4.35% in their next meeting, with a rate decrease not likely until May next year.

About The Author

Ethan O. Miller

Ethan O. Miller is a seasoned Forex analyst. His insightful articles offer a unique perspective on currency trends, aiding both novice and experienced traders in navigating the Forex market.

See author's posts