According to the latest data published by the Australian Bureau of Statistics (ABS) on Wednesday, Australia’s monthly Consumer Price Index (CPI) rose 4.9% in the year to July 2023, as against the annual increase of 5.4% seen in June.
The market had expected an increase of 5.2% in the reported period.
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Market reaction
The selling pressure in the AUD/USD pair gathered steam on cooling Australian inflation, which douses expectations of any more rate hikes by the Reserve Bank of Australia (RBA). The pair is losing 0.42% on the day to trade at 0.6450, as of writing.
15-minutes chart
Why Australian inflation data matters to traders?
The quarterly Consumer Price Index (CPI) published by the Australian Bureau of Statistics (ABS) has a significant impact on the market and the AUD valuation. The gauge is closely watched by the Reserve Bank of Australia (RBA), in order to achieve its inflation mandate, which has major monetary policy implications. Rising consumer prices tend to be AUD bullish, as the RBA could hike interest rates to maintain its inflation target. The data is released nearly 25 days after the quarter ends.
