Australian Dollar remains subdued following CPI inflation data
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The Australian Dollar (AUD) edges lower against the US Dollar (USD) on Wednesday after registering over 1% gains in the previous session. The AUD/USD pair depreciates as the AUD remains subdued following the release of Australia’s Consumer Price Index (CPI) data for December reported by the Australian Bureau of Statistics (ABS). Australia’s CPI rose by 3.6% year-over-year (YoY) in December, following a 3.5% (revised from 3.4%) increase prior. The market consensus was for 3.6% growth in the reported period. Australia’s RBA Trimmed Mean inflation increased to 0.2% month-over-month (MoM) and 3.3% year-over-year (YoY). The monthly CPI rose 1.0% in December, up from 0% previously and above the 0.7% forecast. Australia’s headline inflation is remaining above the Reserve Bank of Australia’s (RBA) 2–3% target, reinforcing the likelihood of a tighter RBA monetary policy, supported by recent PMI data and employment data. US Dollar edges higher ahead of Fed policy decision The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is rising after registering more than 1% losses in the previous session and trading near 96.10 at the time of writing. The “Sell America” narrative continues to dominate sentiment, with the DXY sliding to its lowest level since February 2022 as investors position ahead of Federal Reserve (Fed) policy decision. The Federal Reserve is widely expected to keep rates unchanged at 3.50%–3.75% at the end of its two-day meeting on Wednesday, following three consecutive rate cuts in 2025. Markets will focus on the post-meeting press conference for guidance on the policy outlook in the months ahead. Jonas Goltermann, deputy chief markets economist at Capital Economics, said in a note, “While there are several potential culprits for the dollar’s drop, the main driver is the fallout from reports that the US Treasury is considering direct…
Filed under: News - @ January 28, 2026 2:17 am