- The Australian Dollar maintains its position as the US Dollar experiences a decline following weaker-than-anticipated US inflation figures.
- Australia’s Wage Price Index demonstrated a 0.9% increase Quarter-over-Quarter in Q1, exceeding the anticipated 0.8% growth.
- Former US President Donald Trump characterized the relationship with China as “excellent” during a recent interview.
The Australian Dollar (AUD) is extending its upward trajectory against the US Dollar (USD) on Wednesday, building upon gains of over 1.50% recorded in the previous trading session. The AUD/USD currency pair has found renewed strength as the US Dollar weakened in response to recently released US inflation data that fell short of market expectations. The Consumer Price Index (CPI) data released Tuesday indicated a slower pace of inflation, prompting speculation about a potential shift in the Federal Reserve’s monetary policy stance. This, in turn, exerted downward pressure on the US Dollar.
Australia’s seasonally adjusted Wage Price Index demonstrated robust growth, rising by 3.4% year-over-year in Q4 2025. This represents an acceleration from the 3.2% increase observed in Q4 2024 and exceeded consensus market forecasts, which had also projected a 3.2% gain. The latest figures signal a notable recovery from the preceding quarter, which had registered the slowest rate of wage growth since Q3 2022. Examining the data on a quarterly basis, the Wage Price Index climbed by 0.9% in Q1, surpassing the anticipated 0.8% increase. This positive data point suggests a tightening labor market within Australia, potentially influencing future monetary policy decisions by the Reserve Bank of Australia (RBA). Market analysts will be closely monitoring upcoming RBA statements for any indications of adjustments to interest rate policy in response to these wage pressures.
Australian Prime Minister Anthony Albanese commenced his second term in office on Tuesday following a decisive victory in the recent federal election. In a move signaling continuity and stability, key cabinet portfolios—including the Treasurer, Minister for Foreign Affairs, Minister for Defence, and Minister for Trade—remain unchanged. Prime Minister Albanese is scheduled to attend the inauguration Mass of Pope Leo XIV in Rome on Sunday. During his visit, he is also slated to engage in discussions with prominent international leaders, including European Commission President Ursula von der Leyen, with a focus on strengthening bilateral trade relations between Australia and the European Union. These discussions are anticipated to cover a range of topics, including agricultural trade, investment flows, and potential areas for enhanced economic cooperation.
