Australian Dollar Muted After Inflation Data

The Australian dollar held near $0.63 on Wednesday, struggling for clear direction as investors reacted to weaker-than-expected inflation data.

Australia’s monthly CPI indicator eased to a three-month low of 2.4% in February, defying expectations for no change from January’s 2.5% reading.

Meanwhile, the Australian government announced two additional personal income tax cuts set for 2026 and 2027, totaling A$17.1 billion over the forward estimates.

On the monetary policy front, the Reserve Bank of Australia is set to meet next week, where it is widely expected to hold interest rates steady.

However, markets are currently pricing in a two-thirds chance of another rate cut in May, following the RBA’s first reduction in over four years last month.

Still, the central bank has cautioned that further easing is not guaranteed.