AUD Falls as Softer CPI Data Deters RBA Rate Hike Bets

The Australian Dollar (AUD) has come under pressure after the release of softer-than-expected Consumer Price Index (CPI) data. The data, which showed a moderation in price pressures, suggests that the Reserve Bank of Australia's (RBA) tightening cycle may have reached its peak.

According to TD Securities, the softer CPI print provides the RBA with sufficient cover to keep interest rates unchanged at their next meeting. This assessment aligns with the RBA's recent communications, which emphasize a data-dependent approach and a willingness to pause if economic conditions warrant.

The AUD has weakened against major currencies, particularly the US Dollar (USD), following the CPI release. Market participants have adjusted their expectations, now pricing in a lower probability of a rate hike in the coming months.