Australia’s July CPI rose 3.5% YoY, exceeding forecasts and fueling RBA rate hike bets ahead of US PCE data.
The Australian Dollar climbed to 0.7170 against the USD, nearing its highest level since early June, after July’s CPI data surpassed expectations. The 3.5% YoY increase, though down from June’s 3.8%, topped the 3.2% consensus, reinforcing speculation of further RBA tightening.
Markets had anticipated a softer print following June’s 3.8% rise, but the upside surprise kept the AUD supported. Attention now shifts to the US PCE Price Index, which could influence Fed policy expectations and USD direction.
The USD remained under pressure amid waning rate hike bets and lower US bond yields. Traders are awaiting the PCE release before making fresh bets on the AUD/USD pair.