Australia sees CPI inflation at 5% in 2025/26, 2.5% through 2029/30

Eren Sengezer FXStreet

Following are the highlights of Australia's 2026/27 budget and the Treasury's key economic forecasts released on Tuesday, per Reuters.

Australia sees 2025/26 budget deficit at A$28.3 bln vs a$36.8 bln projected.
Australia sees 2026/27 budget deficit at A$31.5 bln, 2027/28 deficit A$31.0 bln.
Australia sees net debt rising to 21.9% of GDP in 2029/30, gross debt to 35.6%.
Australia sees GDP growth at 2.25% in 2025/26, 1.75% 2026/27, 2.25% 2027/28.
Australia sees CPI inflation at 5% in 2025/26, 2.5% through 2029/30.
Australia Treasurer Chalmers: This budget helps, rather than harms, the fight against inflation.
Australia sees unemployment rate at 4.25% in 2025/26, 4.5% in 2026/27 and 2027/28.

Market reaction

The AUD/USD showed no immediate reaction to the budget announcement and was last seen trading at 0.7220, losing 0.4% on the day.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD: The 0.7000 level holds the downside…for now

AUD/USD has clinched its fourth consecutive daily pullback on Thursday, coming closer to the key 0.7000 region while breaking below the critical 200-day SMA at the same time. The Aussie’s decline comes on the back of further gains in the Greenback in a context of rising yields and Fed rate hike bets.

USD/JPY keeps the red near 158.00 as Japanese Yen firms up

USD/JPY retreats from three-week highs and holds losses near 158.00 in the Asian session on Thursday. Surging Japanese bond yields lift the Yen amid looming intervention risks, while the US Dollar preserves overnight gains to a two-month high amid hawkish Fed bets and elevated US bond yields.

Gold bounces off lows, still below $4,300

Gold builds on Wednesday’s retracement, briefly slipping back below $4,250 per troy ounce to attempt a lacklustre rebound afterwards. The better tone in the US Dollar, rising US Treasury yields and expectation of extra rate hikes by the Fed continue to weigh on the precious metal in the latter part of Thursday’s NA session.

XRP is flashing three bullish signals heading into a historically weak October

XRP (XRP) is still flashing 3 bullish signals across its holders, derivatives, and ETF data. These signals come as the token gave back part of its September gains on Thursday. The token traded near $1.50 at press time, down about 6.3% over 24 hours, according to BeInCrypto Markets data. The pullback still leaves XRP up over 15.6% on the week, a gain that tracks a broader market rally.

Advanced economies: From one example of resilience to another

History tends to repeat itself in advanced economies. Once again, growth ultimately fell short of expectations by only a small margin in the first half of 2026, despite the conflict in Iran. As early as 2025, the impact of tariffs was less severe than feared.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.