Inflation rate in Australia may potentially rise again.

The Australian dollar strengthened last week, primarily due to the weakening of the US dollar, largely driven by a decrease in non-farm payroll numbers. Additionally, investors are still awaiting a decision on the interest rate adjustment by the Reserve Bank of Australia (RBA). It is anticipated that the RBA might raise the policy interest rate by another 25 basis points on the upcoming Tuesday. However, RBA's Governor Michele Bullock recently stated that they would not hesitate to increase the interest rate to 4.1% if inflationary pressures continue to rise.

Australia's inflation rate has been consistently decreasing, with the inflation rate at 5.4% in the third quarter, which is lower than the 6% in the second quarter but still higher than the expected 5.3%. Monthly measures of inflation by Melbourne Institute decreased by 0.1% in October, indicating uncertainty in RBA's monetary policy.

The Producer Price Index (PPI) increased by 1.8% on a quarterly basis in the third quarter, showing a rapid acceleration from 0.5% in the second quarter. The key factors contributing to this increase are ongoing labor skill shortages and rising production costs. Additionally, the rising prices of crude oil and increased expenses for electricity and water supply continue to impact production costs.

Job advertisements in Australia declined by 3.0% on a monthly basis in October, following a 0.5% decrease the previous month. Madeline Dunk, an economist at ANZ, commented that although job postings have started to decline, they are still relatively high compared to the past. This decline in job postings suggests a contraction in the economy, with expectations of increased unemployment in the future.

Australia's trade surplus hit a 30-month low at AUD 6.79 billion in September due to a decrease in exports and an increase in imports. Imports increased by 7.5%, reaching a record high of AUD 38.84 billion. This was mainly driven by a significant increase in capital goods imports, which, coupled with the recent depreciation of the Australian dollar, raised production costs.

Exports from Australia decreased by 1.4% from the previous month to AUD 45.62 billion. This decline was largely attributed to a 39.2% decrease in gold exports to AUD 2.42 billion, while mineral exports increased significantly, primarily due to strong demand from China, supported by government initiatives.

Techical analysis data (5H)

Resistance: 1.5449, 1.5476, 1.5502

Support: 1.5397, 1.5372, 1.5344

Source: Investing.com