Australian Dollar Weakens as Soft CPI Tempers RBA Rate Hike Expectations

The Australian dollar, which had benefited from AI-related demand, has come under pressure following another set of softer-than-expected consumer price data, noted Lee Hardman of MUFG.

The lower inflation print tempers the odds of additional interest rate increases from the Reserve Bank of Australia, undermining the currency's yield advantage. Market participants now see a more cautious RBA in the near term.