Australian CPI climbs to 4.3% in September, topping forecasts
Australia's annual inflation rate accelerated to 4.3% in September from 4.0% in August, beating the 4.2% forecast, data from the Australian Bureau of Statistics showed. The figure lifted the Australian Dollar against the US Dollar.
On a monthly basis, prices rose 0.8% in September, double the 0.4% increase recorded in August and above the 0.7% consensus estimate.
The Reserve Bank of Australia’s preferred gauge, the Trimmed Mean CPI, which strips out volatile items, rose 0.3% month-on-month and 3.7% year-on-year over the same period.
Following the release, AUD/USD edged up 0.19% to trade around 0.7043. Over the week, the Australian Dollar had been the strongest performer against the Euro among major currencies.
The stronger-than-expected inflation print comes as the RBA weighs the path of its cash rate, which the central bank lifted by 25 basis points to 4.6% at its most recent meeting, citing persistently elevated price pressures.
A hotter CPI reading tends to support expectations that the RBA will keep monetary policy tight for longer, which can lend support to the Australian Dollar. For forex traders, the data adds to the case for a firmer AUD/USD, while also feeding into broader expectations around interest-rate differentials between Australia and other major economies.
Source: FXStreet