Australian Dollar: Softer CPI keeps RBA sidelined – TD Securities

FXStreet Insights Team FXStreet

TD Securities’ Global Strategy Team expects Australian headline Consumer Price Index (CPI) to ease to 4.2% year-on-year in May, helped by lower transport and recreational prices. Even if inflation surprises higher, they believe the Reserve Bank of Australia (RBA) will likely remain on hold in August. Softer new orders and easing price pressures in the Australia Flash Composite Purchasing Managers' Index (PMI) also support a steady cash rate.

Easing inflation supports steady RBA policy

"We expect headline CPI to ease further in May to 4.2% y/y (cons: 4.3%) from 4.6% last month."

"Transport prices are likely lower on a m/m basis due to a drop in fuel prices while recreational prices could reverse lower as May is a typical lull month for domestic travel."

"Even if inflation surprises to the upside, we believe the RBA is inclined to be on the sidelines in Aug as we flag in our earlier note."

"The drop in new orders and slowing in inflation pressures in S&P's Australia Flash Composite PMI for June adds support to the RBA keeping the cash rate on hold at its August meeting."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD extends losses toward 1.3200 on persistent USD strength

GBP/USD loses further ground toward 1.3200 in the second half of the day on Tuesday. Political uncertainty in the United Kingdom weighs on the British Pound, alongside weak business PMI data for June. Meanwhile, the US Dollar capitalizes on the risk-off mood and hawkish Fed bets ahead of the US PMI release.

EUR/USD falls to fresh 12-month low below 1.1400

EUR/USD comes under renewed selling pressure in the second half of the day on Tuesda and trades at its lowest level since June 2025 below 1.1400. Mixed PMI data from Germany and the Eurozone makes it difficult for the Euro to find demand, while the risk-averse market atmosphere supports the USD, forcing the pair to stay on the back foot. Traders now await the US PMI data.

Gold drops to nearly two-week low, tests $4,100

Gold (XAU/USD) turns south following Monday's rebound and trades deep in the red near $4,100 on Tuesday. Despite positive signals from US-Iran peace talks, widespread skepticism remains toward a final deal and weighs on the precious metal. In the meantime, the USD gathers strength on hawkish Fed expectations and drags XAU/USD lower.

Dogecoin risks fresh yearly lows as bears tighten grip

Dogecoin (DOGE) remains under pressure, trading below $0.09 after failing to break above a key resistance zone, and losing more than 7% last week. Weakening institutional interest, declining social dominance and a rise in bearish derivatives positioning continue to weigh on DOGE. In addition, deteriorating momentum indicators suggest the meme coin risks a deeper correction.

US S&P Global PMI expected to show steady business growth in June

S&P Global will release the June flash Purchasing Managers' Indices for most major economies, with the United States data scheduled on Tuesday. These surveys of top private-sector executives are seen as an early indicator of the country’s economic health.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.