Australia’s annual inflation accelerated to 3.5% in July, surpassing expectations and lifting the Australian Dollar against the USD.
AUD/USD climbed to 0.7180 in European trading, extending gains after Australia’s July Consumer Price Index rose 3.5% year-over-year, above the 3.2% consensus. June’s print stood at 3.8%.
The monthly CPI rebounded 1.0% in July, reversing a 0.1% decline in June and beating the 0.8% estimate. Trimmed Mean CPI increased 0.5% month-over-month and 3.6% annually.
Analysts noted the Reserve Bank of Australia’s August minutes signaled heightened near-term hike risks, though markets price the next full rate increase for February 2027. The USD’s strength ahead of U.S. PCE data may cap further AUD gains.