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On Wednesday, February 26, Aussie inflation figures influenced AUD/USD trends and RBA rate cut bets.
Australia’s Monthly CPI Indicator remained at 2.5% in January softer than expectations of a rise to 2.6%. According to the ABS, annual trimmed mean inflation rose from 2.7% in December to 2.8% in January. Notably, rental prices increased 5.8% in the 12 months to January, down from 6.2% in December, pressured by higher vacancy rates across most capital cities.
The release was closely watched after RBA Governor Michele Bullock referenced the CPI Indicator in last week’s RBA press conference. Governor Bullock highlighted factors that could support further rate cuts, stating:
“A slowdown in wage growth, disinflation in market services, a sustained decline in housing costs, and a partial recovery in supply-side conditions could support another rate cut.”
The AUD/USD pair dropped from $0.63523 to $0.63475 after the inflation report, signaling a more dovish RBA rate path. The RBA’s next interest rate decision will be on April 1
