Fllowing the release of inflation data, AUD/USD has resumed its downward movement.

On Wednesday, the Australian dollar is witnessing a significant drop against the US dollar, with the current AUD/USD rate at 0.6643.

Investors are witnessing the Aussie aiming towards its lowest point in three weeks, as they receive confirmation of the Reserve Bank of Australia's decision to pause its tightening monetary policy cycle.

This development is supported by the Australian inflation statistics for May. The Consumer Price Index (CPI) has decelerated to 5.6% in May, down from April's 6.8%. The CPI figure has fallen below the projected 6.1%, marking the lowest value in the past 13 months.

Earlier, the unexpected interest rate hike by the RBA to 4.1% per annum caught the capital markets and economists off guard. This unprecedented rate has the potential to significantly impact consumer activity within the country's economy.

Now, with inflation showing a slowdown, there is no immediate need for the RBA to further raise interest rates. The Australian central bank retains its flexibility in making monetary decisions, which implies that the tightening cycle could be brought to an end at any given moment.

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