AUD Plummets to One-Week Low as Soft CPI Triggers Heavy Selling

The Australian Dollar (AUD) fell to a one-week low against the Japanese Yen (JPY) due to soft Consumer Price Index (CPI) figures released by the Australian Bureau of Statistics (ABS). The AUD/JPY cross declined, extending its retracement slide from the 114.65 zone, which is its highest level since June 3.

The CPI data showed a 3.8% year-over-year increase in June, compared to 4% growth in May and consensus estimates. However, the monthly print missed forecasts, falling by 0.1% for the second straight month.

This softness prompted traders to unwind expectations of a near-term Reserve Bank of Australia (RBA) rate hike, weighing heavily on the AUD. The Japanese Yen, meanwhile, drew support from speculations that authorities will prop up the domestic currency.