Australian Dollar Falls as Inflation Data Reduces Rate Hike Expectations

The Australian dollar weakened on Wednesday after softer-than-expected inflation data reduced expectations of another near-term interest-rate increase.

The Reserve Bank of Australia had been expected to raise rates again in August, but now markets price the probability at only around 3%, down from approximately 21% before the inflation report.

The Australian dollar traded near $0.6952 against the U.S. dollar, falling about 0.33% during the session.

The yen recovered modestly but remained close to its weakest level in four decades, with investors alert to the possibility of intervention by Japanese authorities.