ANZ Research discusses AUD outlook over the coming week.
"The past week showed that a strong employment trend is not enough to support the AUD. With this threshold having risen, the coming days could be ‘make or break’ for the AUD.
The market focus on the implications of a weaker housing market and higher funding costs, means softer data could drive capitulation in the AUD, as expectations rise that the RBA will change its tone in February. In this light, the CPI and business confidence data are key. Partial surveys suggest the business survey will weaken, but capacity utilisation and profitability will be our focus. We expect a close-to-consensus rise in CPI, but believe the risks are tipped to the downside," ANZ notes.