FX.co ★ Aussie Dollar Sideways Ahead of Key CPI Data

The Australian dollar held steady at approximately $0.650, maintaining a narrow range close to its two-month low as investors anticipated key quarterly inflation figures due next week, which could influence the Reserve Bank of Australia’s policy direction. Market expectations place the annual headline Consumer Price Index (CPI) at 3.0%, reaching the upper limit of the RBA's 2–3% target range, while the core CPI is projected to remain stable. Last week, an unexpected rise in the unemployment rate for September led markets to increase the probability of a 25 basis point rate cut to around 70%, up from 40% previously. Attention is currently focused on a forthcoming address by RBA Governor Michele Bullock for further insights into the central bank's policy stance. Additionally, investors are considering preliminary PMI data that indicated Australia's manufacturing activity contracted for the first time in the year, whereas growth in the services sector accelerated in October. The Australian dollar is poised for a modest weekly gain, bolstered in part by indications of improving global trade relationships, including a recent US-Australia agreement on critical minerals.