Australia will release its inflation updates on Wednesday. The Australian Bureau of Statistics will publish two key metrics ahead of the Reserve Bank of Australia’s policy meeting on November 3-4. Global markets began the week on a positive note due to news of a new trade deal framework between the United States and China. The agreement, pending approval from Presidents Donald Trump and Xi Jinping, signals a reduction in previous tensions.

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In the cryptocurrency world, Pump.fun (PUMP) rose above $0.0050 on Tuesday. This increase is part of a broader positive trend in the market, hinting at a possible rally by the end of the month. The Australian Consumer Price Index (CPI) is expected to rise, which could influence the Reserve Bank of Australia’s upcoming decision. The author does not hold any stock positions mentioned and has no business ties with any company in this article. FXStreet and the author do not provide personalized recommendations and are not responsible for any inaccuracies or incomplete information. This article is not investment advice. As Australia prepares to release inflation data tomorrow, we are looking for confirmation that the Consumer Price Index has increased. This report comes just one week before the Reserve Bank of Australia’s meeting in November, making it very important. A higher-than-expected inflation figure might lead the RBA to adopt a more aggressive policy.

Trading Opportunities

In light of this outlook, traders may want to consider buying call options on the Australian dollar against the US dollar in anticipation of a potential rate hike. For those unsure about the direction but expecting significant price movements, straddle options could capitalize on the expected volatility around the RBA announcement. These strategies can help profit from major market shifts in either direction. We expect the quarterly CPI to exceed the Q2 2025 figure of 1.0%, with market consensus around a 1.2% increase. This would push the annual inflation rate closer to 4.0%, which puts considerable pressure on the RBA since it is well above the target range of 2-3%. A strong inflation number would likely be seen as a signal for tightening policy. The wider market environment supports a stronger Australian dollar, as the recently announced trade deal framework between Washington and Beijing reduces global uncertainty. This positive sentiment is generally good for commodity currencies like the AUD. Additionally, the slight dip in the US 52-week bill auction yield to 3.445% suggests softer long-term rate expectations in the United States. Looking back at the RBA’s aggressive interest rate hikes in 2023, we observed that the AUD/USD could shift more than 1.5% just hours after a rate decision. Implied volatility for AUD options frequently spiked ahead of those meetings. This historical context indicates that volatility itself presents a trading opportunity, as the market is prepared for a sharp response to next week’s decision. Create your live VT Markets account and start trading now.

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