• Australian Dollar slides lower on CPI release.
• RBA has stated last week that rate cuts are not on the table.
• Markets are confident of a single 25 bps cut by year's end.

The Australian Dollar retreated against its US counterpart following the release of Australia's latest inflation data. The soft inflation data has reinforced expectations that the Reserve Bank of Australia (RBA) will cut interest rates later this year. A slowdown in household spending further suggests that the economic cycle in Australia may be easing.

Amidst a complex economic landscape in Australia, the RBA is concerned over persistent inflation and have prompted a cautious approach. With the soft figures released on Wednesday, the markets now anticipate a modest 25 basis point rate reduction in 2024.