The Australian Dollar experienced mixed signals. Initially, hotter-than-expected inflation data in Australia boosted expectations of a rate hike, pushing the currency near a three-year high. However, it later edged lower against the US Dollar as the USD gained strength ahead of a Federal Reserve policy decision. Australian economic data, including CPI, PMI, and employment figures, present a picture of a robust economy, supporting the potential for tighter monetary policy.
- Australian annual inflation rose to 3.8% in December, exceeding expectations.
- Monthly inflation also exceeded expectations at 1.0%.
- Core inflation remained elevated, with the trimmed mean gauge up 0.9%.
- Traders increased odds for a quarter-point rate hike at the upcoming February meeting.
- The Australian Dollar edges lower against the US Dollar.
- Australia’s CPI rose by 3.6% year-over-year (YoY) in December.
- Australia’s RBA Trimmed Mean inflation increased to 0.2% month-over-month (MoM) and 3.3% year-over-year (YoY).
- Australia’s S&P Global Manufacturing Purchasing Managers Index (PMI) came in at 52.4 in January. Services PMI climbed to 56.0 in January.
- Employment Change arrived at 65.2K in December, while the Unemployment Rate declined to 4.1%.
The Australian Dollar’s trajectory is heavily influenced by domestic inflation and economic data, which are reinforcing the likelihood of a tighter monetary policy by the Reserve Bank of Australia. Despite positive economic indicators, the currency’s performance is also subject to fluctuations based on external factors such as the strength of the US Dollar and global economic sentiment.