AUD/USD climbs above 200-DMA – BBH
AUD/USD rallies as Australia’s October inflation prints hotter than expected, reinforcing the RBA’s hold stance and contrasting with aggressive Fed easing expectations, BBH FX analysts report.

AUD/USD rallies as Australia’s October inflation prints hotter than expected, reinforcing the RBA’s hold stance and contrasting with aggressive Fed easing expectations, BBH FX analysts report.

Australia October CPI surprises to the upside at 3.8%

"AUD/USD rallied back above its 200-day moving average. Australia October inflation ran hot and backs the RBA’s on hold guidance. Headline CPI rose to a 17-month high at 3.8% y/y (consensus: 3.6%) vs. 3.6% in September driven by housing, food and non-alcoholic beverages, and recreation and culture. The policy-relevant trimmed mean CPI unexpectedly increased to a one year high at 3.3% y/y (consensus: 3.0%) vs. 3.2% in September."

"For reference, the RBA projects headline and trimmed mean annual inflation of 3.3% and 3.2% by December, respectively. Of note, the October CPI print is the first complete monthly measure of the CPI following the Australian Bureau of Statistics transition away from the quarterly report."

"We remain constructive on AUD/USD. The swaps curve is betting on RBA rate hikes over the next year, in sharp contrast to the nearly 100bps of easing priced for the Fed."

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