The Australian dollar remained relatively unchanged around $0.65 on Wednesday, staying near four-month lows following weaker-than-expected domestic inflation data.
Aussie Dollar muted after inflation data
The monthly CPI rose 2.1% year-on-year in October, matching September's increase but falling short of the 2.3% forecast. This marks the lowest inflation rate since July 2021, partly due to the ongoing effects of the Energy Bill Relief Fund rebate, which helped drive a record decline in electricity prices. The Reserve Bank of Australia has maintained that monetary policy should remain restrictive until there is confidence that inflation is sustainably returning to its target.
Central bank to adapt policy to data
However, the central bank has also stressed that any future policy adjustments will depend on incoming economic data. Externally, the Australian dollar faces pressure from US President-elect Donald Trump’s recent tariff threats, particularly aimed at China, Australia’s largest trading partner.
