Aussie looks attractive in the medium term – ING

The Australian Dollar (AUD) declined after lower-than-expected Australian Monthly Consumer Price Index (CPI). Economists at ING analyze Aussie’s outlook.

Not trusting AUD weakness

In Australia, January inflation was unchanged at 3.4%, below the 3.6% consensus. That contributed to the AUD's weakness, with some of that weakness also a consequence of the RBNZ decision. 

We remain worried about the prospects of disinflation in Australia, and we expect higher inflation in February and towards the middle of the year before a clearer downward path re-emerges. 

We do not exclude another rate hike by the RBA, and we still think AUD looks attractive in the medium term.