AUD Tumbles as Softer Inflation Cools Rate Expectations

The Australian Dollar (AUD) has taken another hit as softer inflation numbers cooled domestic rate expectations. The AUD/USD pair fell to around 0.6970 during Asian hours on Wednesday, marking its second successive day of depreciation.

The decline comes after the release of the Consumer Price Index (CPI) data, which showed a 3.8% year-over-year increase in June, compared to a forecasted 4%. The monthly CPI dropped by 0.1%, beating estimates of a 0.2% rise.

The Reserve Bank of Australia's (RBA) weighted median CPI rose 3.6% on an annual basis during the same period. Traders are now pricing in a 30.5% chance of an immediate rate hike, with markets factoring in a 76.6% probability of a rate increase in September.