FX.co ★ Aussie Dollar Edges Higher After Faster CPI Print

The Australian dollar experienced a modest rise to approximately $0.660 as of Wednesday, reaching its peak in three weeks. This movement came as investors significantly reduced expectations for a rate cut in the upcoming week, spurred by hotter-than-anticipated inflation figures. The Consumer Price Index (CPI) in Australia for September 2025 increased to 3.5% year-on-year, compared to 3% in August, and surpassed the forecasted 3.1%, marking the highest level since July 2024. This rise was primarily attributed to increased costs in housing and transportation, maintaining inflation above the Reserve Bank of Australia's target range of 2–3%. Additionally, core inflation, measured by the trimmed mean CPI, also climbed more than expected, showing a 1% rise from the previous quarter and 3% on an annual basis, marking its first increase since December 2022. These recent statistics highlight ongoing inflationary pressures despite indications of a slowing labor market, leading investors to considerably lower expectations for further monetary easing. Consequently, the market now speculates with almost a 90% certainty that the RBA will maintain the cash rate at 3.6% during its meeting on November 4.