Aussie dollar sinks below 69 US cents after surprise inflation news
Updated . First published at
The Australian dollar has plunged to a nearly three-month low against the greenback after Wednesday’s unexpected inflation results.
The Aussie was buying 68.99 US cents as markets opened on Thursday, the lowest level seen since early April.
The Aussie dollar has sunk to an 11-week low following Wednesday's inflation figures. AAP
It tumbled below 70 cents almost immediately following the release of inflation figures on Wednesday, which offered a mixed bag for economists.
However, the fall to the nearly-three-month low was as much due to the recent strength of the US dollar.
“The USD extended its gains for a fifth consecutive session,” Westpac economist Luka Belobrajdic said.
“The Australian dollar fell -0.2 per cent against the greenback, while the yen (-0.1 per cent), euro (-0.2 per cent) and sterling (-0.3 per cent) also weakened,” he added.
“Against other crosses, the AUD was little changed.”
The dollar is now down almost 5 per cent from where it sat in the middle of May following key pressure from RBA meetings and inflation uncertainty.
The Australian dollar had not spent as much time consistently above 70 US cents since 2022.
In March 2025, for example, the Aussie dollar was closer to 63 cents.
Sticky inflation raises doubt over next RBA move
Inflation slowed to 4 per cent in the 12 months to May, higher than the Reserve Bank of Australia’s (RBA) target but its lowest level in three months.
The consumer price index came in slightly lower than the 4.2 per cent in April, according to figures released by the Australian Bureau of Statistics on Wednesday.
It was the lowest figure since the war in Iran began in February and the second consecutive month of slowing inflation.
The trimmed mean – the RBA’s preferred measure of underlying inflation – rose to 3.6 per cent in the 12 months to May, up from 3.4 per cent in April.
While a welcome sign to economists who were expecting a rise of 4.3 per cent, inflation remains above the RBA’s 2-3 per cent target.
Inflation slowed to 4 per cent in the 12 months to May, higher than the Reserve Bank of Australia’s target. Louise Kennerley
The CPI figures supports some economists’ forecast for an on-hold interest rate decision later this year, according to Commonwealth Bank senior economist Trent Saunders.
“While there is still a risk of further tightening if inflation proves more resilient, the activity side of the economy is slowing and becoming more of a focus,” Saunders said.
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