Money markets and economists are nearly agreed that the Reserve Bank of Australia's (RBA) monetary policy board will hold the cash rate steady at 4.35% on Tuesday, the last day of its two-day August meeting, according to a same-day note from the Commonwealth Bank of Australia.

Quarterly trimmed mean inflation, RBA's preferred measure, is above its 2% to 3% target range, at 3.6%. But the June data was lower than the 3.8% figure forecast by the RBA in May.

The re-escalation in the conflict in the Middle East also risked reigniting inflation after it eased in June, according to the lender's head of Australian economics Belinda Allen.

The weaker demand environment will also give businesses less scope to pass on higher costs, Allen added.