Australia: AUD to jump higher on upside inflation surprise – Commerzbank

Australian Q4 Consumer Price Index (CPI) data could be the deciding factor for RBA’s February meeting. Economists at Commerzbank believe that an upside surprise could lift the Aussie.

“Consumer prices are likely to increase the expectation of a rate step next week, if they are in line with expectations, thus supporting AUD a little. If the data surprises to the upside, the AUD is likely to jump higher due to the adjustment of rate expectations.”

“it will be more interesting for AUD how the RBA positions itself for the coming months as of 1st February – i.e. whether an imminent end of the rate cycle is in view or not. If that is the case the market is likely to lower its expectations for the peak of the key rate, which would put pressure on AUD.”

See – Australian CPI Preview: Forecasts from seven major banks, sticky inflation figures