Australian Dollar Weakens on Mixed Hot Inflation Data Above RBA Target

The Australian dollar has slid lower after inflation data exceeded the RBA target but featured softer-than-expected core measures. Initial reports highlighted headline and core inflation above target, boosting odds of a May rate hike and supporting AUDUSD upside potential. However, details revealed Q1 y/y CPI at 4.1%, March monthly CPI at 4.6% y/y (vs 4.7% expected), and trimmed-mean core at 0.8% q/q (vs 0.9% expected), prompting caution amid Treasury's higher inflation peak warning. A 25bp RBA hike on May 5 remains priced in, but near-term AUD underperformance persists as markets reassess policy timing.