Aussie sharpens losses to two-week trough after inflation data

The Australian dollar fell in European trade on Wednesday on track for the fourth straight loss against the US dollar, plumbing two-week lows after forecast-missing inflation data from Australia.

The data showed inflation has stabilized within the Reserve Bank of Australia’s targets in the medium term, raising the prospects of a rate cut in April.

The Price

The AUD/USD fell 0.35% to 0.6320, the lowest since February 14, with a session-high at 0.6354.

The pair lost 0.1% yesterday against the dollar on renewed concerns about Donald Trump’s tariffs.

Australia’s Inflation

Australia's consumer prices rose 2.5% y/y in January, same as December and below estimates of 2.6%. 

Inflation remains firmly nestled within the 2-3% RBA target in the medium term, boosting the odds of an RBA rate cut in April.

Australian Rates

Following the data, the odds of an RBA interest rate cut in April surged from 20% to 40%, and the odds of a May rate cut settled at 100%.

Now traders await important data on Australian inflation, unemployment, and wages.