From an overnight client note, remarks on the Australian dollar and the Reserve Bank of Australia in the wake of the CPI data

(bolding mine)

  • Headline inflation was 1.9% YoY rather than the 2.0% expected, while both of the RBA's preferred measures of core inflation remained below the central bank's target band of 2-3%.
  • Alongside signs of cooling in the housing market, our economists now expect the first hike of this cycle to come in Q3 18 rather than Q2.
  • Bloomberg data suggests the market views a Q3 hike as a 50:50 outcome at this point.

HSBC comments on the AUD (this from when it had bounced from its Asian lows back towards above 0.8100):

  • The swift recovery in AUD-USD might hint at an underlying appetite to buy AUD on any weakness but this bounce says more about the USD mood than the AUD, in our view.
  • If we look at the AUD-NZD cross, for example, it dropped sharply on the data and has not bounced back. In fact, NZD, along with the ZAR, are the outperformers across the entire FX market.

Good work from HSBC, AUD weakened against as the USD gained in US time

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