By: Michael Boutros, Sr. Technical Strategist
As of 24 February 2026, the Australian dollar is holding within a broader uptrend while markets await fresh Consumer Price Index data. Inflation expectations are tightly linked to how far the Reserve Bank of Australia may extend its tightening cycle this year. Currency traders are weighing whether RBA trimmed mean CPI can justify additional rate hikes. The stakes are elevated because policy divergence with the United States Federal Reserve continues to influence Australian dollar direction.
Michael Boutros, Senior Market Analyst at FOREX.com, has spent more than a decade analyzing global foreign exchange markets through multi time frame technical and macro frameworks. His work focuses on the interaction between central bank policy expectations and price structure, giving him a distinct vantage point on how Australian CPI outcomes can shift Reserve Bank of Australia strategy and Australian dollar positioning.
Australian CPI data is directly influencing expectations for further Reserve Bank of Australia tightening in 2026. Boutros notes, "we are looking for the consumer price index to come in at 3.7% versus 3.8" while "the trimmed CPI, the core CPI is expected to hold 3.3%", underscoring how even marginal shifts could recalibrate rate forecasts. Consequently, if inflation proves stickier than expected, markets may price a more aggressive path for the Reserve Bank of Australia, reinforcing yield support for the Australian dollar. Conversely, softer inflation could trigger a reassessment of hawkish positioning, increasing near term volatility across Australian dollar pairs.
Interest rate disparity between the Reserve Bank of Australia and the United States Federal Reserve remains a structural pillar for the Australian dollar. Boutros emphasizes that "the markets are expecting the RBA to hike rates further this year", highlighting how policy expectations continue to favor the currency over the longer run. As a result, sustained tightening from the Reserve Bank of Australia would preserve a relative yield premium, supporting capital inflows into Australian dollar assets. However, any narrowing of that divergence, particularly if United States policy proves firmer than anticipated, could moderate Australian dollar gains despite the broader constructive trend.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Michael Boutros, Senior Market Analyst
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