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

In the Monetary Policy Report released with its rate decision, the Bank of Canada raised its CPI forecast to 3.1% YoY in 2027 from a prior 2.0% projection. Governor Macklem said energy prices have risen and are expected to remain elevated and that cost pressures are building, citing those factors as the main rationale supporting further hikes and saying the scope for policy easing has narrowed. He added the bank had discussed holding rates; arguments for pausing included that the inflation pickup is concentrated in energy, the economy still has spare capacity, and a U.S. tariff dispute could slow growth. The governing council agreed future decisions will be made on a meeting-by-meeting basis. BOC officials also upgraded GDP growth forecasts, in part reflecting federal measures including a proposed productivity super-deduction and progress on large projects.

KPMG chief economist Swoak said Wosh is unlikely to offer further explanation of the Fed's decision at today's press conference. She suggested policymakers may be concerned that tightening too quickly could do “damage” to the economy. She flagged vulnerabilities in the AI boom: mid‑October saw a sharp tech-sector sell-off, and scattered reports say lenders have grown more cautious about extending additional funding to hyperscale companies for AI infrastructure — at least at previous valuation levels.