AUD/USD: External drivers remain dominant and generally unsupportive – ING

Market news

25 October 2023

AUD/USD: External drivers remain dominant and generally unsupportive – ING

The Australian Dollar is stronger after third-quarter inflation decelerated less than expected. Economists at ING analyze Aussie’s outlook.

The help to AUD/USD should be rather short-lived

The headline rate slowed from 6.0% to 5.4% (consensus 5.3%) and the trimmed-mean CPI rose 5.2% against 5.0% expectations.

The Reserve Bank of Australia Cash Rate future curve now prices in more than a 50% probability of a hike in November. Our base case has been that the RBA would have taken rates a nudge higher before ending its tightening cycle, and today’s figures endorse our expectations.

Still, the help to AUD/USD should be rather short-lived as external drivers remain dominant and generally unsupportive.

Pound Sterling remains weak on vulnerable demand outlook

EUR/HUF seen at 375 at year-end and at 365 in the middle of 2024 – ING

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