Australia’s CPI figures for the first quarter will be pivotal for what the RBA does next. There will be renewed interest this time in Australian CPI figures, given what happened with New Zealand’s CPI. The AUD has been affected by other events, and inflation could be a pivotal point in the exchange rate.
RBA has taken two sessions off, arguing inflation will come down. We should remember that the last time Australia published its CPI, it was a surprise acceleration, prompting speculation there would be continuous hiking like what we’ve seen in New Zealand. RBA’s concern was the liquidity situation, and they took a decidedly dovish position. Presumably the RBA was betting that inflation would fall in the past three months.
How long does it take to call a stop?
New Zealand’s inflation rate has decreased over the past period. RBNZ, however, has been more aggressive than ever in lowering inflation. The Australian inflation rate might not be as low as New Zealand’s, but it could still be lower.
There is a consensus that Australia’s inflation will come down to 6.8% The increase in unemployment rate from the 7.8%…