Economic Calendar

The Reserve Bank of Australia is expected to keep interest rates unchanged in its upcoming policy meeting today, after the country’s inflation data for September and the third quarter came in hotter than expected. The stronger inflation figures effectively ended any remaining market bets for a rate cut this year, with traders now expecting the RBA to hold rates steady until at least next spring before possibly easing. Futures markets reflect this sentiment, showing only a 7% chance of a cut this week — a sharp drop from 81% just two weeks ago.

Governor Bullock has emphasized that inflation remains a bigger concern than rising unemployment, and with the trimmed mean CPI rising to the top of the RBA’s 2–3% target band, the central bank’s cautious stance appears justified. The stronger inflation data have also raised questions about whether the RBA’s current rate of 3.6% might already be its terminal rate for this cycle. However, if unemployment rises sharply or if job losses accelerate, that could eventually push the bank toward easing.

So far, job market signals are mixed. ANZ’s job advertisements fell by 3.5% in September, the fastest drop since late 2023, suggesting early signs of softening demand for labor. Still, this alone is unlikely to be enough to sway the RBA in the short term. Additional labor and activity indicators — like PMI surveys and construction data — will be watched closely, but these typically have only a limited effect on the currency.

Given the combination of stubborn inflation and a central bank leaning toward caution, the outlook for the Australian dollar appears mildly bullish in the near term. The RBA’s reluctance to cut rates and any hints of hawkishness in its forward guidance could lend further support to the Aussie. However, if future data show clear weakness in employment or a faster economic slowdown, this could cap gains later on. For now, market conditions point toward a short-term uptrend in the AUD.

 

Analysis by Coach Angel, RoboAcademy

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Disclaimer: Investing is risky. Investors should study the information before making investment decisions.