Breaking: Australia’s CPI inflation declines to 0.8% in Q2 vs. 1.0% expected

FXStreet Team FXStreet

According to the latest data published by the Australian Bureau of Statistics (ABS) on Wednesday, the country’s Consumer Price Index (CPI) rose 0.8% in the second quarter of 2023, compared with the 1.4% increase seen in the first quarter. The market consensus was for a growth of 1.0% in the reported period.

Annually, Australia’s CPI inflation softened to 6.0% in Q1 2023 as against the expected 6.2% increase and the previous print of 7.0%.

The RBA Trimmed Mean CPI for Q2 advanced 1.0% and 5.9% on a quarterly and annual basis respectively. Markets predicted an increase of 1.1% QoQ and 5.9% YoY in the quarter to June.

The monthly Consumer Price Index inflation dropped to 5.4% YoY in June vs. 5.4% expected and May’s increase of 5.6%.

Market reaction

In a knee-jerk reaction to the Australian inflation data, AUD/USD fell sharply toward 0.6700. At the time of writing, AUD/USD is losing 0.72% on the day to trade at 0.6739.

AUD/USD: 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.

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FXStreet Team

FXStreet

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