The Australian Bureau of Statistics (ABS) showed that headline inflation was 2.7% year-on-year in Augustslower than the 3.5% increase in July, but in line with the latest market estimates.
Except for volatile elements and holiday travel, Consumer prices rose 3.0% in Augustslower than the 3.7% rise in July.
Meanwhile, Reserve Bank of Australia cuts average inflation – an alternative measure of core inflation – came in at 3.4%, down from the 3.8% annual increase in July.
Link to the Australian Bureau of Statistics’ August Consumer Price Index report
Details revealed that housing (+2.6%), food and non-alcoholic beverages (+3.4%) and alcohol and tobacco (+6.6%) saw the biggest gains, while transport (-1.1%) and furnishings (-0.9%) helped offset price increases.
Australian Dollar vs Major Currencies: 5 minutes
Comparison between the Australian Dollar and major currencies Chart by TradingView
The Australian dollar, which had weakened slightly in early Asian trading, saw a brief decline on the broadly cooler inflation reading.
But the Australian dollar quickly recovered its losses after the report was released. The Australian dollar quickly approached its pre-report levels after traders likely considered that today’s CPI release was unlikely to change the RBA’s bias that inflation “remains too high”.
At the time of writing, the Australian dollar is falling against its peers except for weaker currencies such as the US dollar and the Japanese yen.