The AUD/CHF currency pair held within a tight daily range on Wednesday, as the Australian Dollar demonstrated a rather muted reaction to the latest inflation figures.
Data by the Australian Bureau of Statistics indicated that consumer price pressures eased more sharply than anticipated in May, providing some breathing room for policy makers. Headline Consumer Price Index increased 4.0% year-over-year, down from 4.2% YoY previously and below the 4.4% consensus forecast.
On a month-over-month basis, the CPI fell 0.7%, reversing the prior 0.4% rise and coming in weaker than the projected 0.3% decline. The Reserve Bank of Australia’s (RBA) preferred core gauge, the Trimmed Mean CPI, rose 0.4% on the month and 3.6% compared to a year earlier.
The softer inflation data reduced the urgency for additional RBA tightening, while also limiting upside potential for the Australian Dollar.
On the Swiss side, the Swiss National Bank left its policy rate unchanged at 0% at its June meeting, marking the fourth consecutive decision to hold rates steady. The SNB reiterated that this stance was consistent with supporting both price stability and economic growth.
However, the central bank raised its inflation forecast and stressed that it remained prepared to step into the foreign exchange market to counter excessive Swiss Franc strength.
The AUD/CHF currency pair was last up 0.10% on the day to trade at 0.5600.
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