Inflation CPI Australia Overtakes Expectations and Reinforces Pressure on RBA: Impacts on AUD and Global Markets

Igor Pereira · 2026-02-25T11:43:08Z

The Bureau of Statistics of Australia (ABS) released, on the morning of Wednesday (25 February 2026), the annual Consumer Price Index (IPC) data, revealing that inflation in the country remained resilient in 3.8% in January. The result was contrary to market expectations, which projected a slight deceleration to 3.7% after recording 3.8% at the end of December. This stagnation at high levels suggests that inflationary pressures in the Australian economy are more "adherent" than anticipated, challenging the narrative of a near monetary relaxation by the Reserve Bank of Australia (RBA).

By Igor Pereira, financial market analyst, Junior member WallStreet NYSE.

Grounds for inflation and monetary policy

Maintaining inflation by 3.8% is driven by structural factors and point adjustments:

End of Grants: The closure of government discounts in electricity tariffs at the end of 2025 resulted in a jump of 32.2% in energy prices in january, being the largest individual contributor to the index.
Inflation Core: The measure of trimmed mean, which excludes volatile items, rose to 3.4%, overcoming the projections and indicating that inflation is disseminated by various sectors, such as housing (6.8%) and clothing (2.9%).
Interest Expectations: With inflation above the target, the market now warrants a higher probability of a further 25 basis points increase in RBA interest rate in May, raising it to 4.1%.

Coin Pair Analysis (EURUSD, GBPUSD, AUDUSD)

The resilient inflation scenario in Australia and the global strength of the US dollar shape the movement in European and Oceania pairs:

AUD/USD: The Australian dollar reacted immediately after the die, reaching approximately $0.71. The higher interest perspective for longer in Australia supports AUD compared to USD, although the interest differential with Fed remains the main limiter of extensive rallying.
EUR/USD: The single currency remains under pressure. While Australia is dealing with internal inflation, the eurozone faces tariff uncertainties from the US, keeping the pair in a low-tech trend, testing supports in the US region. 1.17.
GBP/USD: The pound sterling shows behaviour similar to the euro, fighting against the hegemony of the dollar. Inflation data "hot" in Oceania tend to reinforce the thesis that global inflation has not yet been overcome, which reduces the chances of aggressive interest cuts by large powers in 2026.

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