AUD Slips as Softer Inflation Data Dampens Rate Hike Bets

The Australian Dollar (AUD) weakened against major peers on Tuesday after softer-than-expected inflation data was released, reducing expectations for further interest rate increases by the Reserve Bank of Australia (RBA).

Australia's monthly Consumer Price Index (CPI) indicator rose 3.4% in the year to January, below market forecasts of 3.6%. The core measure, the trimmed mean, eased to 3.8% from 4.0%

The data suggests that the RBA's aggressive tightening cycle is having its intended effect, cooling demand and bringing inflation back towards the central bank's 2-3% target band.