Australia CPI Preview: AUD Traders Brace for a Key Inflation Test
August 26, 2026
Australian inflation takes centre stage in the Asian trading session today, with the July Consumer Price Index (CPI) scheduled for release at 11:30 a.m. AEST by the Australian Bureau of Statistics.
The report is particularly important for the Australian dollar because inflation remains above the Reserve Bank of Australia's 2–3% target range. Markets are watching closely for signs that price pressures are cooling — or proving more persistent than expected.
📊 What the Market Expects
Westpac expects Australia's monthly CPI to rise 0.84%, with annual inflation easing to around 3.3%. Its forecast for the trimmed mean is around 3.5% year-on-year, keeping underlying inflation above the RBA's target range.
The monthly CPI figure will therefore be closely watched alongside the underlying inflation measures.
🇦🇺 Why AUD/USD Could Move
A stronger-than-expected CPI reading could increase expectations for tighter RBA policy and potentially provide support for the Australian dollar.
Conversely, a softer inflation report could reduce expectations for additional tightening and put pressure on AUD.
The biggest reaction could come in AUD/USD, while AUD/JPY and Australian bond yields may also see increased volatility.
🔎 Goods Prices in Focus
One of the key questions for traders is whether goods prices rebound after recent easing.
If goods inflation accelerates while services inflation remains sticky, markets could interpret the report as evidence that Australia's inflation problem is proving difficult to eliminate.
Key Things to Watch
- Australia July CPI
- Monthly CPI: Market expectation around 0.9%
- Annual inflation: Expected to remain above the RBA's 2–3% target
- Trimmed-mean inflation: A key measure of underlying pressure
- AUD/USD: Potential immediate volatility
- RBA expectations: Possible impact on future rate decisions
Forex Outlook
Today's CPI release could be one of the biggest catalysts for the Australian dollar this week. Traders should watch the actual result versus expectations, rather than focusing only on whether inflation rises or falls.
A significant upside surprise could strengthen AUD, while a downside surprise could trigger selling pressure.
Australia CPI is scheduled for release today, August 26, 2026.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Forex trading involves substantial risk.