Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Australian Dollar Swoons as Soft CPI Boosts RBA Rate Cut Bets

Australian Dollar Swoons as Soft CPI Boosts RBA Rate Cut Bets

Talking Points:

  • Australia’s benchmark inflation rate hit 1-year low in the first quarter
  • Year-on-year CPI growth rate 1.3% vs. 1.7% expected by economists
  • Aussie Dollar fell with bond yields, implying rising RBA rate cut bets

The Australian Dollar swooned after first-quarter CPI data disappointed economists’ expectations (as expected), fueling RBA rate cut speculation. The headline year-on-year inflation rate registered at a one-year low of 1.3 percent, falling short of bets calling for a print at 1.7 percent.

The Aussie fell alongside front-end bond yields, suggesting the release was interpreted as raising the probability of RBA stimulus expansion on the horizon. The priced-in probability of a 25bps rate cut at next week’s policy meeting has jumped to 49 percent from just 15 percent ahead of the CPI announcement.

What do FXCM traders’ AUD/USD bets say about the trend? Find out here !

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES