When is the Australian CPI, and how could it impact AUD/USD?

Australian Monthly CPI Overview

The latest round of month-on-month Australian Consumer Price Index (CPI) inflation figures will kick off the Antipodean trading session on Wednesday at 01:30 GMT, or 11:30 Australian Eastern Standard Time. Australian inflation metrics are expected to show a second slight uptick, with Australian CPI expected to tick up to 2.9% YoY in August, rising from 2.8% the month before.

How could it impact AUD/USD?

Typically, a higher CPI print will support the Australian Dollar (AUD), and could see the Aussie rise against the US Dollar (USD), while a downside miss against forecasts would see AUD/USD retreat. With inflation continuing to run a spot higher than the Reserve Bank of Australia’s (RBA) top-line targets, the RBA could quickly run out of room to provide economy-supporting interest rate cuts.

However, as noted by FXStreet’s Pablo Piovano: “With prices still running hotter than target, policymakers are reluctant to cut too quickly. Policymakers must strike a balance between supporting growth and preventing inflation from escalating.

Even with global uncertainty swirling, Australia’s economy looks more resilient than expected. Early reads for September suggest Manufacturing PMI may ease to 51.3 and Services to 52.0, but both remain comfortably in expansion territory.

Other data have been firmer too: Retail Sales rose 1.2% in June, the trade surplus widened to A$7.3 billion in July, and business investment ticked higher in Q2. GDP also surprised, up 0.6% QoQ and 1.8% YoY.

The labour market is showing a few cracks, though. Unemployment held steady at 4.2% in August, but total employment dropped by 5.4K.”