AUDUSD Weakens as Sticky Core Inflation Offsets April CPI Headline Miss

Australia’s April CPI released on 27 May at 4.2% y/y, below the 4.4% consensus, triggering an immediate sell-off in AUDUSD. Pre-release warnings from NAB, CBA and Westpac that underlying inflation would stay firm proved accurate, with the trimmed-mean core rising to 3.4%—its highest level since late 2024. The softer headline, driven by a temporary fuel excise cut, has increased the odds of an RBA June pause while the scheduled July reversal of fuel relief keeps later tightening risks alive. Markets now balance near-term AUD weakness against persistent core and housing inflation pressures.