AUD Tumbles on Hot Inflation and RBA's Measured Approach

The Australian Dollar (AUD) is experiencing pressure from hot domestic inflation and global market volatility.

According to TD Securities, the AUD's preferred trimmed mean core CPI measure is expected to rise 0.9% QoQ in Q2, an acceleration from 0.8% in Q1, pushing annual core inflation to 3.7%. Headline inflation for June is also expected to print at 4.2% YoY, outpacing the market consensus of 4.0%.

This has sparked debate around near-term Reserve Bank of Australia (RBA) rate hikes, with TD Securities noting that sticky core inflation and housing cost pressures will keep the RBA on high alert.