Australia’s June inflation rate came in lower than expected, easing the pressure on the Reserve Bank of Australia (RBA) to adjust policy in the short term and giving it more room to continue assessing the economic outlook. After the data release, the Australian dollar and bond yields fell. The RBA had raised interest rates at its first three meetings this year in an attempt to curb inflationary pressures that had already emerged before the global energy shock triggered by the US-Iran conflict.

Australia’s June inflation rate came in lower than expected, reducing the immediate pressure on the Reserve Bank of Australia to adjust policy and giving it more room to continue assessing the economic outlook. After the data release, both the Australian dollar and bond yields declined. The Reserve Bank of Australia raised interest rates at its first three meetings of the year in an attempt to curb inflationary pressures that had emerged even before the US-Iran war triggered a global energy shock. The CPI released on Wednesday indicates that although prices remain elevated, the Reserve Bank is unlikely to need to tighten monetary policy again on August 11, when it will also issue its updated quarterly forecasts.