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.

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

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.