June CPI rose 3.8% YoY, missing the 4% estimate and easing pressure on the Reserve Bank of Australia to hike rates further.
AUD/USD extended losses to 0.6970 in Asian trading on Wednesday after Australia’s June Consumer Price Index rose 3.8% year-over-year, below the 4% consensus and May’s 4% print. The monthly CPI fell 0.1%, defying expectations of a 0.2% increase.
Markets had anticipated a 4% annual gain, matching May’s figure, while the RBA’s weighted median CPI climbed 3.6% YoY. The softer data reduced bets on further RBA tightening, weighing on the Australian Dollar.
Geopolitical tensions in the Middle East supported the USD, with Iran launching ballistic missiles at a US base in Jordan. All missiles were intercepted, but the attack heightened risk aversion, bolstering demand for the greenback.