AUDUSD
Analysis

Bloomberg—The Australian dollar climbed to about $0.650 on Wednesday, marking a one-week high. This move came after inflation data came in stronger than expected, increasing expectations that the RBA will keep a firm policy stance. The latest monthly report showed that price pressures are still high, with headline inflation rising to 3.8% in October. This is the fastest pace in seven months and higher than forecasts.

In addition, trimmed mean inflation — the RBA’s key measure of underlying price growth — increased to 3.3%, also above expectations. This follows last month’s strong quarterly inflation data, which had already encouraged the RBA to leave interest rates unchanged.

Furthermore, Assistant Governor Hunter recently stated that the job market is slightly above sustainable levels, as unemployment continues to fall and wages remain high. This ongoing tightness supports the central bank’s careful approach. As a result, markets see very little chance of rate cuts before May next year, while some experts believe the easing cycle may already be over.

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