Australia August Headline Inflation Hits 4.0% While Core CPI Slows to 0.2%

The Australian dollar retreated as markets scaled back rate hike expectations following August inflation figures. Australia's headline CPI accelerated to 4.0% year-over-year from 3.5% in July, matching expectations and driven by surging fuel costs. On a monthly basis, headline CPI rose 0.4%, down from 1.0% in the prior month. Crucially, the Reserve Bank of Australia's preferred core gauge, the trimmed mean CPI, slowed to 0.2% month-over-month, below the 0.3% consensus, while holding steady at 3.6% annually. Markets now price around a 25% chance of an RBA hike in November following its previous increase to 4.6%.