AUD/USD strengthened in Asian trade on Thursday, trading around 0.7055.
Australian inflation surprised to the upside, lifting market odds that the
Reserve Bank of Australia will raise the cash rate to 4.85% at the next policy
meeting to roughly 82% (vs ~62% before the print). Markets will focus on US
September PCE data due later Thursday. Commonwealth Bank FX strategist Carol
Kong said markets read the absence of explicit discussion of further hikes as
dovish or at least not sufficiently hawkish. Brown Brothers Harriman noted
September headline CPI rose 4.3% YoY (vs 4.2% expected, 4.0% in August), driven
by housing and transport, reinforcing the case for another RBA hike and
supporting the AUD.
