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Economic news
28.08.2024

European session review: AUD rises, following Australia’s July CPI data

TimeCountryEventPeriodPrevious valueForecastActual
01:30AustraliaCPI, y/yJuly3.8%3.4%3.5%
08:00EurozoneM3 money supply, adjusted y/yJuly2.3%2.7%2.3%
08:00EurozonePrivate Loans, Y/YJuly0.3%0.5%0.5%


AUD strengthened against most of its major rivals in the European session on Wednesday as investors digested Australia’s Consumer Price Index (CPI) data, which showed that the country’s inflation decelerated for the second straight month in July. 

Australian Bureau of Statistics (ABS) reported that the domestic CPI increased 3.5% YoY in July, easing from 3.8% YoY in the previous month. The reading was the lowest since March (3.5% YoY) but slightly exceeded economists’ forecast of 3.4% YoY. 

Markets interpreted the July CPI report as encouraging for the Reserve Bank of Australia’s policymakers, who, at their August 5-6 meeting, stressed the necessity for the monetary policy to be sufficiently restrictive until they are confident that inflation is moving sustainably towards the target range of 2%-3%. They also noted that it was unlikely that the cash rate would be lowered in the short term.

Today’s report did not influence the markets' RBA rate cut bets. They continue to expect one 25-basis-point rate cut this year.


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