Dollar Weakens Slightly, AUD Nears 3-Year Peak After Australian Inflation Strengthens
The Bloomberg Dollar Index weakened on Wednesday (February 25th) as markets reassessed US trade uncertainty. This weakening came after two sessions of moderate gains, while investors monitored the direction of President Donald Trump's tariff policy following the Supreme Court ruling that limited the previous tariff scheme.
In the G-10 market, the Australian dollar (AUD) performed the strongest against the greenback after Australian inflation data came in higher than expected. January CPI rose 0.4% (m/m), above the 0.3% projection, while annual inflation held at 3.8% (y/y). The trimmed mean core inflation measure rose to 3.4% (y/y), still above the RBA's 2%–3% target. The biggest boost came from housing costs.
The strengthening data pushed AUD/USD up to near 0.712, keeping the AUD near multi-year highs. As a result, the currency market has also adjusted its RBA policy expectations, with the likelihood of tightening in the first half of this year strengthening.
Meanwhile, the Japanese yen lagged among major currencies, with USD/JPY remaining high around the mid-156 range, amid speculation that political dynamics could restrain the Bank of Japan's tightening pace. In Europe, the euro and pound tended to strengthen slightly, following improving global sentiment ahead of major catalysts from the technology sector (particularly Nvidia's report) and the latest developments on US tariffs.
Source: Newsmaker.id
