Australian inflation prints above forecasts, lifting odds of another RBA rate increase and pushing the currency pair toward 0.7200 resistance.
Australian inflation data exceeded expectations in July, with headline CPI easing to 3.5% YoY from 3.8% but trimmed mean inflation holding steady at 3.6%. Both measures surpassed market forecasts, complicating the Reserve Bank of Australia’s path to its 3.3% target by late 2026.
Markets now fully price a 25-basis-point RBA hike by February 2027, up from a 70% probability before the release. The shift has driven AUD/USD back to test the 0.7180–0.7200 range, a key resistance zone.
Analysts remain constructive on the Australian dollar over the next two quarters, citing attractive carry and potential Chinese stimulus. However, they expect gains to moderate as growth slows and inflation trends toward the RBA’s target.