FX.co ★ Australian Dollar Struggles Despite Hot Inflation Print

On Wednesday, the Australian dollar dropped to approximately $0.643, continuing its recent decline despite inflation data exceeding expectations. April's Consumer Price Index (CPI) indicated a 2.4% rise, consistent with the previous two months, yet marginally above the anticipated 2.3%. However, this data provided limited support for the currency, as attention remained on the Reserve Bank of Australia's (RBA) dovish stance. Last week, the RBA implemented a 25 basis point rate cut and is expected to implement further easing measures in the months ahead. Policymakers have identified potential growth risks due to intensified US-China trade tensions and highlighted decelerating inflation as a concern. Currently, markets are predicting a 65% probability of an additional rate cut in July, with expectations of a total easing of 75 basis points by the first quarter of 2026. Further compounding the Australian dollar's weakness, the US dollar continues to gain strength, buoyed by improving economic sentiment in the United States.