The Australian dollar strengthened to around $0.650 on Wednesday, marking its third consecutive session of gains despite softer-than-expected inflation figures. Headline CPI rose 2.1% year-on-year in May, easing from 2.4% in the prior three months and below market forecasts of 2.3%. Core inflation also slowed to 2.4% from 2.8%, the lowest since November 2021, keeping price pressures within the Reserve Bank of Australia's 2–3% target band. Combined with the recent weaker-than-expected GDP data, these figures have bolstered expectations of a 25bps rate cut by the RBA in July, with markets now pricing in an 89% chance and a total of 73bps rate cuts by year-end. However, the Aussie gained support from improved risk sentiment following US President Trump’s announcement of a ceasefire between Iran and Israel. But caution remains as intelligence reports indicate recent US missile strikes failed to fully destroy key Iranian nuclear facilities, casting doubt on the ceasefire’s durability.