AUD: Rate hike expectations supported – BBH

Brown Brothers Harriman's (BBH) analysis shows that the NAB December business survey supporting expectations for a rate hike by the RBA. If the upcoming trimmed mean CPI inflation exceeds the RBA's projection, it could lead to a February rate increase and bolster the AUD.

AUD outlook hinges on inflation data

"The NAB December business survey backs RBA cash rate futures’ hike expectations. Both business confidence and business conditions recovered to a two-month high."

"If the December trimmed mean CPI inflation (due tomorrow) tracks above the RBA’s 3.2% y/y December projection, that could seal the deal for a February rate increase and support a firmer AUD."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)