Aussie Dollar Edges Higher After Faster CPI Print

The Australian dollar inched higher to around $0.660 on Wednesday, hitting its highest level in three weeks, as investors sharply pared back bets on a rate cut next week after inflation data came in hotter than expected.

Australia’s monthly CPI rose 3.5% year-on-year in September 2025, up from 3% in August and above expectations of 3.1%, marking the highest level since July 2024.

The upturn was mainly driven by higher housing and transport costs, keeping inflation above the Reserve Bank of Australia’s 2–3% target range.

Core inflation also rose more than expected, with the trimmed mean CPI up 1% from the previous quarter and 3% annually, the first time it increased since December 2022.

The latest figures reinforced the view that price pressures remain persistent despite signs of a cooling labor market, prompting investors to significantly scale back bets on further easing.

Markets now price in a nearly 90% chance the RBA will hold the 3.6% cash rate at its November 4 meeting.