SYDNEY] A gauge of Australia’s monthly inflation came in slightly faster than expected in April, coinciding with a period of tariff turmoil that roiled markets and encouraged the Reserve Bank of Australia (RBA) to lower interest rates last week.

On Wednesday, figures showed that Australia’s monthly Consumer Price Index (CPI) came in slightly higher than expected at 2.4% year-on-year in April 2025, although unchanged from the previous two months and marking the lowest level since November 2024.

The Australian inflation indicator for April, published this morning, came in at 2.4%, which is slightly higher than expected, Commerzbank's FX analyst Michael Pfister notes.

Goldman Sachs has estimated the redirection of Chinese goods into Australia, particularly in toys, furniture and clothing, could subtract 20-50 basis points from headline inflation over the next year or two. Those forecasts were made before China and the U.S. agreed to pause steep tariffs this month.

Australia's progress on getting inflation down has been so swift some economists believe it could fall lower than the Reserve Bank bargained for.

The Australian dollar has extended its losses on Wednesday. AUD/USD is trading at 0.6415 in the North American session, down 0.44% on the day.