Soft Australia CPI Data Dims RBA Rate Hike Prospects, Weighs on Aussie

Australia’s Q2 Consumer Price Index and June headline inflation both missed consensus forecasts, according to TD Securities. The softer data reduces the urgency for the Reserve Bank of Australia to tighten monetary policy further.

TD Securities strategists noted that the downside surprise takes some heat out of the near-term rate outlook. Markets are scaling back bets on additional hikes, which has weighed on the Australian dollar across the board.

The aussie slipped against major peers as the data reinforced the view that the RBA can remain on hold for longer. Focus now shifts to upcoming labor market and retail sales figures for further direction.