Australian Q2 CPI Eases, Dampening RBA Tightening Expectations and Weakening AUD

Australia's Consumer Price Index (CPI) for the second quarter of 2026 registered lower than market forecasts, with the year-over-year inflation rate falling to 3.9% against a consensus of 4.1%. The quarterly increase was 0.6%, below the expected 0.7%. This softer inflation data has reduced expectations for further monetary policy tightening by the Reserve Bank of Australia (RBA) and contributed to a broad weakening of the Australian dollar in currency markets.