FX.co ★ Australian Dollar Edges Higher After Inflation Data

The Australian dollar saw a slight uptick, approaching $0.64 on Wednesday, as it clawed back some losses from the previous trading session. This movement came in response to the latest inflation figures. Australia's headline inflation showed a 2.4% increase in the first quarter, consistent with the prior quarter's growth and marginally surpassing market forecasts of 2.3%. Conversely, core inflation dropped to 2.9% from a previous 3.3%, supporting forecasts of an imminent rate cut. It is widely expected that the Reserve Bank of Australia will lower its cash rate by 25 basis points to 3.85% in May, with markets anticipating additional reductions to possibly 2.85% by the year's end. This outlook is influenced by mounting economic uncertainty within Australia and increased external risks, notably due to potential global repercussions from new US tariffs.