RBA Average CPI or RBA core inflation increased 1.6% year-on-year in the second quarter, beating the estimated 1.5% increase. The quarter-to-quarter reading ticked higher to 0.4% as expected from 0.3%.
With optimistic core inflation, the Reserve Bank of Australia has room to move next week. As a result, the Australian Dollar began to strengthen.
At time of writing, AUD / USD is trading at session highs of 0.6884, representing a 0.16% increase on the day. The pair reached a low of 0.6862 earlier today, the last level seen on June 19.
It should be noted that central banks loosen a quarter percentage point at each of the last two meetings, bringing the cash level to a historic low of 1 percent. More importantly, the market is worried that the RBA will cut interest rates again next week if inflation figures disappoint expectations.