Softer-than-expected CPI figures reduce bets on further Reserve Bank of Australia rate hikes, weighing on the currency.
The Australian Dollar extended losses against the USD, with AUD/USD dropping to 0.6970 in Asian trading on Wednesday. The decline marks a second consecutive session of depreciation following the release of domestic inflation data, which fell short of expectations.
Australia’s latest Consumer Price Index print indicated softer price pressures, cooling market expectations for additional tightening by the Reserve Bank of Australia. Prior to the release, traders had priced in a higher probability of a rate hike in the near term.
The currency pair showed limited immediate reaction beyond the initial dip, as investors await further cues on monetary policy and global risk sentiment.