AUD/USD pressured as hot Australian CPI reduces RBA rate cut probability

AUD/USD declined 0.4% to 0.6485 following stronger-than-expected Australian inflation data that dampened hopes for Reserve Bank of Australia rate cuts in 2025. November CPI accelerated to 2.8% year-over-year from 2.1% previously, exceeding forecasts of 2.5%. Core inflation measures also surprised to the upside, with trimmed mean CPI at 3.5%. The data reinforces the RBA's hawkish stance relative to other major central banks, with markets now pricing only a 30% chance of a rate cut by May 2025, down from 65% before the release. AUD/NZD jumped 0.7% to 1.1050 as diverging central bank paths become evident. Technical resistance for AUD/USD emerges at 0.6540, while support holds at 0.6450. The inflation surprise positions the RBA as potentially the last major central bank to ease policy, supporting AUD on interest rate differentials.