AUD Weakens Amid Softer Inflation Data Ahead of Fed Decision

The Australian Dollar is continuing its downward trend as inflation data released on Wednesday showed softer-than-expected numbers. The Consumer Price Index (CPI) declined by 0.1% month-over-month in June, falling short of expectations for a 0.2% increase.

Additionally, the annual inflation rate eased to 3.8%, below market forecasts of 4.0%. This has led to concerns about the potential impact on monetary policy decisions by the Reserve Bank of Australia (RBA).

The RBA's preferred measure of underlying inflation, the Trimmed Mean CPI, rose only 0.3% month-over-month, also lower than expected. The annual underlying rate remained unchanged at 3.6%.

As investors await the Federal Reserve's monetary policy announcement later on Wednesday, they are closely watching for signals about whether persistent inflation could justify tighter policy in the future.