FX.co ★ Australian Dollar Muted After Inflation Data

The Australian dollar remained around $0.63 on Wednesday, lacking a decisive trend as investors responded to weaker-than-anticipated inflation data. Australia's Consumer Price Index (CPI) for February fell to a three-month low of 2.4%, contrary to predictions that it would remain steady at January’s 2.5%. Concurrently, the Australian government revealed plans for two additional personal income tax reductions in 2026 and 2027, amounting to A$17.1 billion over the upcoming financial projections. On the monetary policy front, the Reserve Bank of Australia (RBA) is scheduled to convene next week, with most anticipating that interest rates will remain unchanged. Yet, the market is currently factoring in a 66% likelihood of a further rate reduction in May, following the RBA's first cut in over four years last month. Nonetheless, the central bank has indicated that additional monetary easing is not a certainty.