AUD Vulnerable Despite Slightly Soft CPI Data, Says RBA's Hunter

The Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter highlighted that inflation remains above the 2-3% target band, despite a slightly softer-than-expected Consumer Price Index (CPI).

Hunter attributed the downside surprise in headline inflation to lower fuel prices. However, she stressed that the RBA must continue to exert pressure on price growth to prevent higher inflation expectations from becoming entrenched.

The Assistant Governor noted that labor conditions are still somewhat tight, with job growth holding up 'not too badly' in the first half of the year. She also pointed out that weaker consumer sentiment has yet to clearly feed through to household spending.