Additionally, rising house prices could push rents higher, contributing to housing services inflation. Rents remain a focal point for the RBA, given its effects on inflation.
The Monthly CPI Indicator fell within the RBA's 2-3% target range in August. AMP's Head of Investment Strategy and Chief Economist, Shane Oliver, commented,
"Our base case remains for a first RBA cut in Feb (after Q3 & Q4 CPIs confirm falling inflation, but the chance of an earlier move is high."
Meanwhile, China's private sector PMIs also require consideration. The Caixin Manufacturing PMI will likely impact buyer demand for the Aussie dollar more. Economists forecast the Caixin Manufacturing PMI to increase modestly from 50.4 in August to 50.5 in September.
A higher-than-expected PMI could signal an improving demand environment, possibly boosting the Aussie dollar. China accounts for one-third of Australian exports. With a trade-to-GDP ratio of over 50%, increasing demand from China could improve trade terms, supporting the Aussie economy.
Later in the Monday session, Fed Chair Powell is on the calendar to speak. Powell's reaction to Friday's Personal Income and Outlays Report and insights into the Fed's interest rate plans will influence US dollar demand. Support for a 50-basis point rate cut in November and another in December may push the AUD/USD toward $0.70.