Aussie strengthened broadly in Asian session after inflation came in hotter than expected. Headline CPI rose to 3.0%, putting price growth back at the top of the RBA’s 2–3% target band.
For next week’s RBA meeting, the outcome makes little difference — a hold at 3.60% was already priced in. But for November, markets will have to reassess. With headline and core measures still sticky, the RBA may decide that it is premature to deliver another rate cut.
Governor Michele Bullock’s comments earlier this month resonate more strongly after today’s release. She highlighted that households are beginning to spend again after a period of restraint, warning that momentum could limit how far and fast the RBA can ease. The CPI data reinforces her message. And, even if a November cut is delivered, the broader policy path is unlikely to accelerate.
Technically, AUD/CAD’s strong rebound today suggests that corrective pullback from 0.9225 could have completed at 0.9075 already. Break of 0.9225 will resume the whole rally from 0.8440 to 61.8% projection of 0.8440 to 0.9041 from 0.8902 at 0.8273. Firm break there will pave the way to 100% projection at 0.9503.
Nevertheless, below 0.9119 minor support will delay the bullish case, and bring more consolidations in the near term.
AUD/NZD is also extending its advance, aided by speculation of a 50bps RBNZ cut at the next meeting. Sustained trading above 200% projection of 1.0649 to 1.0920 from 1.0744 at 1.1286 will pave the way to 261.8% projection at 1.1453.
However, below 1.1229 minor support will bring consolidations first.
