While softer inflation numbers may fuel speculation about a November RBA rate cut, investors should consider the recent RBA press conference.
During the September press conference, RBA Governor Michele Bullock warned that headline inflation could come within the target range but may not reflect underlying inflation.
Expert Views on the RBA Rate Path
AMP Head of Investment Strategy and Chief Economist Shane Oliver recently gave his insights into RBA monetary policy, stating,
“Falling job vacancies & hiring plans evident in our Jobs Leading Indicator continues to point to slower jobs grth ahead. But for now the RBA will regard the jobs mkt as still tight, which on its own reduces the possibility of a rate cut by yr end. Our base case is Feb for first cut.”
Shane’s comments highlight the RBA’s challenges in bringing underlying inflation sustainably within its target range. Tight labor market conditions could continue to fuel consumption and demand-driven inflation.
Australian Dollar Daily Chart
In Tuesday’s US session, US consumer confidence and labor market data will influence US dollar demand. Higher JOLTs job openings and an uptick in consumer confidence may reduce bets on a December Fed rate cut. A more hawkish Fed rate path could pull the AUD/USD toward $0.65550.
Conversely, weaker-than-expected numbers could increase bets on multiple Q4 2024 Fed rate cuts, driving the AUD/USD toward $0.66500.
Aside from US economic indicators, US Presidential Election polls also require consideration. Rising support for Donald Trump could raise the risk of punitive tariffs on China, potentially impacting the Aussie economy and the Aussie dollar.