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Wednesday, October 28, 2026
What’s happening: The Australian dollar gained versus the US dollar this morning as investors digested the latest inflation data.
What happened: Hotter-than-expected inflation data sparked speculations of a fifth rate-hike by the Reserve Bank of Australia this year.
The AUD/USD hit a five-week high despite strength in the US dollar weighing slightly on the forex pair this morning.
Why it matters: Data released this morning showed that the monthly CPI surged 0.8% in September. This marked the biggest gain in six months and came in higher than market estimates of 0.7%. The annual inflation also accelerated to 4.3% in September from 4.0% in August. This, too, exceeding market estimates of 4.2% and hit its highest level since March.
The monthly core inflation climbed 0.3%, in-line with market expectations, while the annual core inflation rate rose to 3.6%.
The latest pickup in inflation sent the pace further above the central bank’s target range of 2%-3%, triggering speculations of the RBA hiking its benchmark interest rates at the November 3 meeting.
The latest CPI figures added weight to the hawkish remarks made by RBA Governor Michele Bullock earlier on Wednesday. Bullock warned of upside risks to inflation are, while projecting price pressures to exceed the central bank’s August projections.
Meanwhile, the Fed is scheduled to announce its rate decision later today, with investors widely expecting the US central bank to keep its rates unchanged after raising in September.
Strength in the US dollar weighed on the AUD/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 102.42.
The AUD/USD pair gained more than 0.2% to 0.7042 this morning, while the S&P/ASX 200 rose around 0.2% to trade at 8,865.60.
What to watch: Investors await the US Federal Reserve’s interest rate decision today.
Australia will release data on export prices and import prices on Thursday. Australia’s export prices, which rose 1.1% in the second quarter, following a 0.5% gain in the previous quarter, are expected to surge 1.3% in the third quarter. Analysts expect Australia’s import prices to rise 1.4% in the third quarter compared to a 5.7% gain in the previous quarter.
Context: Crude oil prices gained this morning as investors monitored ongoing developments in the Middle East.
Details: Crude oil prices broke a two-day losing streak as investors assessed the latest US strategy and watched key political developments in Israel.
The US urged regional Persian Gulf nations to prepare for possible renewed military operations against Iran following the midterm elections on November 3.
Exit polls in Israel’s national election showed a tight race between Prime Minister Benjamin Netanyahu and opposition leader Gadi Eisenkot.
Meanwhile, the API (American Petroleum Institute) said that US crude oil inventories declined by 2.031 million barrels in the week ended October 23, versus market estimates of a rise of 800,000 barrels. Inventories at Cushing dipped by 453,000 barrels following a gain of 900,000 barrels a week ago. Gasoline inventories rose by 2.39 million barrels, while distillate stocks added 380,000 barrels in the latest week.
Strength in the US dollar limited gains for crude oil as a higher greenback makes commodities more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 102.42.
Spot price for crude oil rose around 1% to $100.48 per barrel this morning, while Brent crude added 1% to trade at $110.78 per barrel.
In other commodities trading, gasoline rose 0.9% to $3.0911 and natural gas jumped 1.7% to $3.054. Heating oil bucked the trend, slipping 0.2% to $4.6089.
What to watch: The EIA’s data of US crude oil stocks change (1830 UAE Time) will be released today. US crude inventories, which dipped by 3.061 million barrels in the week ended October 16, are expected to rise by 0.8 million barrels in the latest week. US gasoline stockpiles, which tumbled by 2.952 million barrels, are expected to fall by 1.4 million barrels. Analysts expect US distillate stocks to decline by 0.6 million barrels in the latest week following a gain of 1.675 million barrels in the previous week.
Other Markets: European indices closed mostly higher on Tuesday, with the DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.71%, 0.51% and 0.47%, respectively, and the FTSE 100 down by 0.75%.
The leaders of Finland and Norway held a joint phone call with Russia’s President Vladimir Putin, urging him to end the conflict with Ukraine. The news sent the USD/RUB forex pair higher in forex trading this morning.
The Reserve Bank of New Zealand left its official cash rate unchanged at 2.75%, compared to market estimates of a 25bps hike, which exerted pressure on the NZD/USD forex pair.
Eurozone’s bank lending to households jumped 3.1% year-over-year to €7.276 trillion in September, in-line with August’s pace and market estimates. This sent the EUR/USD pair higher in forex trading this morning.
Thailand’s domestic vehicle sales jumped 14.28% year-over-year to 55,254 units in September, slowing from 25.59% in the previous month, which lent support to the USD/THB forex pair.
Taiwan’s consumer confidence index edged lower to 66.27 in October from 68.77 in the previous month. However, the USD/TWD pair slipped in forex trading this morning.
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