Home›Forex›Central Banks›Australian Dollar slips as softer inflation trims odds…

Australian Dollar slips as softer inflation trims odds of RBA hike

June inflation fell 0.1% month over month, pulling year over year to 3.8% and cutting the perceived chance of an August rate increase to about 4% from above 20% earlier.

Reported · Written up by our desk · Central Banks

Commerzbank analyst Volkmar Baur said weaker-than-expected Australian inflation has sharply reduced market-implied odds of an August Reserve Bank of Australia rate hike, weighing on the Australian dollar.

He pointed to June prices that fell 0.1% month over month versus a 0.2% rise expected, bringing the year-over-year rate to 3.8%, its lowest level in four months.

Baur acknowledged services and non-tradable inflation remain elevated, but said the overall signals support keeping rates unchanged at the Aug. 11 meeting and seeing no further hikes for the rest of the year.

He added that oil price volatility is expected to complicate the outlook, leaving the AUD likely to remain under pressure as expectations shift.

More like this

Sources