FX.co ★ Aussie Dollar Holds Ground Amid Stronger CPI Data

The Australian dollar remained stable at approximately $0.650 on Wednesday, following gains made in the previous session. This steadiness came as investors assessed new data, which included a stronger-than-anticipated inflation report. The latest figures showed that consumer prices surged by 2.8% year-on-year in July, an increase from 1.9% in June and surpassing market expectations of 2.3%. Additionally, core inflation indicators rose, with the trimmed mean advancing to 2.7% from 2.1%, and inflation excluding volatile items and holiday travel climbing to 3.2% from 2.5%. In a positive development, construction activity exceeded predictions, growing by 3% in the second quarter against an anticipated 0.8% increase. Meanwhile, the Westpac Leading Index rose by 0.1% in July, signaling sluggish growth and a gradual recovery extending into 2026. Despite these developments, the Aussie dollar faced downward pressure as the US dollar strengthened. Global sentiment also remained cautious after the US President threatened to impose 200% tariffs on Chinese goods if China restricts magnet exports. Nonetheless, markets remain confident that the Reserve Bank of Australia (RBA) will proceed with an interest rate cut in November, despite the unpredictable CPI figures.