Australia CPI set to cushioned inflation in Q1, supporting additional rates

Australian monthly consumer price indicator is expected to 2.3% in March.
CPI quarterly inflation expected even more than 3%, and the basic data achieve the RBA goal.
The Australian Reserve Bank will meet in mid -May to decide on monetary policy.
The Australian dollar facilitates her American rival after reaching a fresh height of 2025.

Australia will publish a lot of inflationary data on Wednesday, and financial markets provide for price pressure to mitigate further at the beginning of 2025, paving the way for additional interest rates of the Australian Bank (RBA). The central bank is to meet to decide on monetary policy on May 19-20.

Returning to the data, Australian Bureau of Statistics (ABS) will publish two different inflation meters: a quarterly consumer price indicator (CPI) for the first quarter of 2025 and a monthly March CPI, which measures the annual price pressure over the past twelve months. The quarterly report contains the average CPI RBA, favorite inflation indicator of decision -makers.

RBA maintained the official money (OCR) at 4.10%, when it met at the beginning of April, after providing a rate of 25 base points (BPS) in February, the first after the tourist cycle, which began in 2022.

What can you expect from the number of inflation rates in Australia?

ABS is expected to report that the monthly CPI increased by 2.3% a year to March, soothing from 2.4% published in February. Quarterly CPI is expected to escalate by 0.8% quarter quarter (QOQ) and 2.2% year -on -year (y) in the first quarter of 2025. In addition, preferred by the central bank, in the previous quarter of Bank Central.

Finally, it is forecasted that the average average CPI RBA will escalate by 0.7% QOQ, higher than before by 0.5%. Despite this, the numbers will be located in order to maintain inflation between 2 and 3%, which means that the central bank can provide additional interest rate reductions in the foreseeable future.

Meanwhile, the economic activity in the country, measured by the gross domestic product (GDP), increased modestly in the last quarter of 2025, with the GDP by 0.6% in reality, exceeding the number of expectations on the market by 0.5% and marking the strongest results since December 2022. Modest progress scared the spirit of recession, although the economy is not yet beyond the forest.

Finally, it is worth adding that, according to the latest RBA forecasts, it is expected that the escalate in GDP in Australia will reach about 2.2% in 2025. In addition to the purpose of inflation of central banks, the lipidal growth was part of decision -makers to limit interest rates to avoid more steep economic failure.

Meanwhile, the President of the United States (USA) Donald Trump began a global trade war. After the announcement of tariffs in neighboring countries, Trump launched “mutual tariffs” on most trading partners. Australia was in 10% of the basic fee, facing a 25% tariff on all steel and aluminum exports to the USA. However, most of the tensions lay between China and the USA, with tariffs in hundreds. China is the main trading partner in Australia, and the local economy can bear echoes between the largest hosts in the world.

In addition, concerns related to the impact of the trade war on the American economy keep the US dollar (USD) on the rear foot. In April, USD fell to fresh low 2025 against most main rivals and retains its cushioned tone regardless of the market mood.

The Governor of the RBA Michelle Bullock noticed: “If there are large tariffs for China, Chinese trade will probably try to find other ways to find a sales. Australia can even be a beneficiary of this. We can therefore find influence on deflation for Australia, if it appears.”

How can the consumer price index report affect Aud/USD?

The numbers of inflation are, as usual, crucial. The softening of the inflation pressure should satisfy the plants for a reduction in the RBA rate in May.

In general, the higher numbers of CPI would be stubborn in the case of Auds among the expectations of Jastrzębie RBA. However, the opposite scenario is also critical: alleviating inflation can push decision -makers towards a more pigeon attitude.

Moving to the release of CPI, the Aud/USD pair trads around the 0.6400 mark, withdrawing from a fresh annual level of 0.6450.

Valeria Bednarik, the main FxStreet analyst, says: “The Aud/USD couple consolidates profits and despite the end -held there and back, the stubborn matter remains strong. Technical readings on the daily chart suggest that the couple can correct lower technical indicators from their last peaks near excessive readings. Despite this, the case of a break.”

Bednarik adds: “The Aud/USD pair should find the initial short -term support in the 0.6340 region, and subsequent slides reveal the price zone 0.6280, in which the stubborn 20 simple movable average (SMA) coincides with a flat 100 SMA. The extension of the year should cause that the Aud/USD test would be sold around 0.6500.

Economic indicator

Consumer price index (Yoy)

Consumer price index (CPI), issued by Australian Bureau of Statistics Quarterly measures changes in the price of a fixed basket of goods and services acquired by household consumers. CPI is a key indicator of measuring inflation and change of shopping trends. Reading Yoy compares prices in the reference quarter to the same quarter a year earlier. High reading is perceived as stubborn for the Australian dollar (AUD), while low reading is seen as bear.

Frequently inflicted by American-chin

In general, the trade war is an economic conflict between two or more countries due to extreme protectionism at one end. This means creating trade barriers such as tariffs that cause a counterattack, escalating import costs, and thus maintenance costs.

The economic conflict between the United States (USA) and China began at the beginning of 2018, when President Donald Trump established trade barriers for China, claiming that unfair commercial practices and theft of intellectual property from the Asian giant. China took retaliation, imposing tariffs on many American goods, such as cars and soy. The tension escalated until both countries signed trade agreements in the American-Chinese phase in January 2020. The agreement required structural reforms and other changes in the Chinese economic and commercial system and pretended to restore stability and trust between two nations. However, Coronevirus’s pandemic focused on the conflict. It is worth mentioning, however, that President Joe Biden, who took office after Trump, kept the tariffs and even added additional fees.

The return of Donald Trump to the White House as 47. The US president caused a fresh wave of tension between two countries. During the election campaign in 2024, Trump undertook to impose a 60% tariff on China after returning to the office, which he did on January 20, 2025. With the return of Trump, the trade war in the USA-China is aimed at resuming where it remained, with the principles of Tatat, influencing the global economic landscape among the global resources, which will reduce, which will reduce, which will reduce, which will reduce, which will reduce, which will reduce, which Especially investments, as well as directly nutrition in indexing consumers.