RBA Statement says inflation has peaked, labour market remains very tight, some further tightening may well be needed.
However, the Aussie decline was slowed due to another drop in the US Dollar that tumbled to a two-month low on Tuesday in choppy trading. The US data is disappointing the bulls of late which are reinforcing investor bets that the Federal Reserve is nearly done with its own tightening cycle. Meanwhile, last week’s PCE data, the Federal Reserve´s preferred inflation measure, were mixed. However, while headline and core both came in a tick lower than expected, super core accelerated for a second straight month to 4.63% YoY and is the highest since October. ´´This is not the direction that the Fed desires and so we look for the hawkish tilt in Fed comments to continue,´´ analysts at Brown Brothers Harriman explained.