Aussie Dollar Dips on Softer CPI Data

AUDUSD −0.08% AUDUSD.SIM AUDUSD_LMAX AUDUSD_ZERO −0.09% The Australian dollar edged down to around $0.71, easing from a recent one-week high as investors assessed the latest inflation data for signals on the policy outlook. Headline inflation slowed more than expected to 4.2% annually in April from 4.6% previously, undershooting forecasts of 4.4%. Monthly CPI also cooled sharply to 0.4% from 1.1%, reinforcing signs of easing price pressures. However, underlying inflation remained sticky, with the trimmed mean measure rising 3.4% year-on-year, in line with expectations and still above the Reserve Bank’s 2-3% target. The mixed figures reinforce a cautious policy outlook, as core inflation continues to run hot even as headline pressures ease. Markets largely viewed the data as supporting a hold at the upcoming June 15–16 RBA meeting, though expectations for further tightening remain in play, with swaps pricing an even chance of an August rate hike, down from 64% before the data.