Forex Today: Australian Inflation Drops Unexpectedly – 25 March 2026

Australian inflation fell unexpectedly from 3.8% to 3.7% on an annualised basis.

1. Australian CPI (inflation) came in a bit lower than widely expected, with the annualised rate falling unexpectedly to 3.7% after month-on-month inflation came in at zero. This has weakened the Aussie a bit as it makes the prospect of further rate hikes by the Reserve Bank of Australia a little less likely.
2. President Trump has continued to talk up the prospect of a deal to end the war in the middle east, insisting that he was negotiating with undisclosed Iranian leaders over terms, and that the Iranians had already made a concession as a "gift" (this is probably the new Iranian commitment to allow "non-hostile" shipping to pass through the Strait of Hormuz). Although the Iranians continue to officially deny talks will take place, Iranian sources confirm that there are discussions, but based on the leaked sets of demands, there are wide gaps between the parties. It is important to note that the war continues unabated, with Iran continuing to fire on Gulf nations in recent hours. The Polymarket prediction market sees a ceasefire as likely to happen in the second half of April, and also sees the US as likely to send ground forces into Iran in April.
3. The effect on the markets of the Trump peace talk has been:
1. The price of Crude Oil ;has stabilised after falling. It is not falling back to get close to its pre-war price.
2. Stock markets are either consolidating or higher - they are doing especially well in Asia, with the Nikkei 225 Index ;up by more than 2.5% today.
3. Gold ;and Silver ;have risen quite firmly, being the major beneficiaries of Iran peace talk - Gold is up by 2% and Silver is up by 3% today so far.
4. The Forex market had a very quiet Asian session. The USD/JPY currency pair ;is a little higher, again trading above the ¥159 handle. Trend traders will still want to be long of this currency pair.
5. Flash PMI Services and Marketing data for the USA, Germany, and the UK released yesterday showed that manufacturing data was a little better than expected everywhere and services data was a little worse than expected everywhere.
6. UK CPI (inflation) data came in at 3.0% annualised, as expected.
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