• AUD/USD rallies across the board RBA following a CPI beat.
• Trimmed Mean CPI QoQ: 0.4% vs 0.4% expected and prior 0.3%.
• RBA Trimmed Mean CPI YoY: 1.6% vs 1.5% expected (slightly bullish) vs 1.6% prior.

Following yet another Chinese manufacturing data that arrived in contraction territory, for AUD traders, the latest Consumer Price Index numbers have come out. Q2 CPI was expected to rise 0.5% QoQ, 1.5% YoY with the trimmed mean up 0.4% QoQ, 1.5% YoY. There were little expectations for the data to come anywhere close for a positive input for the Aussie as it is evident that there was very little inflationary pressure in the Australian economy.

However, it will draw much attention as it is the week's most significant local economic release following after RBA governor Philip Lowe last week suggesting that Australians should "expect an extended period of low rates" despite strong employment growth and a low jobless rate. His announcement helped to further weaken the Australian dollar, which last week dropped 1.8 per cent against the greenback. The Aussie dropped a further -.68% since the start of this week. 

The data arrived as follows:

• RBA Trimmed Mean CPI QoQ: 0.4% vs 0.4% expected and prior 0.3%.
• RBA Trimmed Mean CPI YoY: 1.6% vs 1.5% expected (slightly bullish) vs 1.6% prior.
• Consumer Price Index QoQ: 0.6% vs 0.5% expected and 0.0% prior. 
• Consumer Price Index YoY: 1.6% vs 1.5% expected and 1.3% prior.

The data is a slight relief to Aussie bulls, but given the prospects of a dovish RBA, bulls will need to hold their horses as we head into the Federal Reserve's interest rate decision. 

About the Consumer Price Index

The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The trimmed mean is calculated as the weighted mean of the central 70% of the quarterly price change distribution of all CPI components, with the annual rates based on compounded quarterly calculations.