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AUD: February inflation coming in tonight – ING

Australia releases CPI data for February tonight, with consensus looking at a third consecutive 2.5% YoY headline print. The trimmed mean re-accelerated in January from 2.7% to 2.8%, causing new troubles for the RBA, which started easing last month, ING's FX analyst Francesco Pesole notes.

AUD to face downside risks to 0.62 in April

"We suspect the full-time-led drop in employment in February (-52k) needs to be matched with some new disinflationary signs to convince markets to fully price back a cut by May (April looks off the cards). Our call for the terminal rate is 3.35%, so 75bp of easing, although the pace and timing of further cuts are highly data-dependent and admittedly quite uncertain."

"That said, the RBA is a secondary driver for AUD compared to tariff news and global risk sentiment. AUD/USD is not particularly cheap based on short-term drivers (rates and equities), and we still expect some downside risks to 0.62 in April as tariff risks intensify."

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FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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