Aussie Dollar Slips as Investors Brace for Rate Cut
The Australian dollar declined against the greenback, after data showing inflation eased more than expected prompted investors to ramp up bets on Reserve Bank of Australia interest rate cuts.
AUD/USD dropped 0.3% to 0.6232, leading declines among major currencies
NZD/USD down as much as 0.1% to 0.5660
Selling in response to the weak 4Q inflation data is being soaked up in part by exporters meeting their month-end obligations, according to Asia-based FX traders
The trimmed mean of the inflation data “should keep AUD heavy as it represents a genuine step down in the quarterly pace,” said Richard Franulovich, head of FX strategy at Westpac. “That said, with 18bps Feb rate cut risk already priced before this data point and the tariff headline barrage taking a rest today I suspect AUD can hold above 0.6220 today”.
The Bloomberg Dollar Spot Index was little changed after closing up 0.3% on Tuesday
USD/JPY up 0.1% to 155.71
EUR/USD little changed at 1.0433
GBP/USD little changed at 1.2441
Yield on 10-year US Treasuries eased 1bp to 4.52%
Source: Bloomberg
