RBA: February rate hike expected – ING

💡 DMK Insight

Australia’s CPI data just came in hotter than expected, and here’s why that matters: persistent inflation in services and housing could pressure the RBA to tighten policy further. For traders, this means keeping an eye on the AUD/USD pair, especially if inflation continues to rise. A strong labor market typically supports consumer spending, which can exacerbate inflationary pressures. If the RBA feels compelled to act, we might see the AUD strengthen against other currencies, particularly if the Fed remains dovish. Watch for key levels around recent highs in the AUD/USD; a break above could signal further bullish momentum. But don’t overlook the flip side—if inflation peaks and the RBA hesitates, we could see a swift reversal. Monitor the upcoming economic indicators closely, as they could provide clues on whether this inflation trend is sustainable or just a blip. The next few weeks will be crucial for gauging market sentiment and positioning accordingly.