RBA Maintains Hawkish Stance Despite Softer Inflation Data

The Reserve Bank of Australia (RBA) has maintained its hawkish stance despite softer-than-expected inflation data. The August Consumer Price Index (CPI) showed a headline inflation rate of 0.4% month-over-month and 4.0% year-over-year, while the trimmed mean inflation rate was 0.2% m-o-m and 3.6% y-o-y.

The RBA recently raised interest rates for the second time in Q3 and is expected to tighten monetary policy again in the new year.

However, building approvals plummeted 6.1% month-over-month, which contrasts with booming data centre activity that is shaping Australian Dollar prospects.