The Australian dollar surged after CPI earlier today was hotter than expected but it’s since faded completely with AUD/USD selling accelerating in the past hour.
Today’s inflation report likely sidelined the RBA from cutting rates at the September 30 meeting, as the market now prices only a 9% chance of a cut. That rises to nearly 50% for the November meeting though, so economic data will continue to bounce the currency around.
As for this latest move, it’s not a re-think of the path of the RBA but a symptom of wider USD strength. The Aussie is only down slightly on the day but is the second-best performing major currency today, putting up big gains against the euro, yen and kiwi.
