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Australian dollar strengthens as July CPI boosts odds of more RBA hikes
Markets nearly fully price a 25-basis-point RBA hike to 4.60% by year-end after Australia’s July CPI rose to 3.5%, with the trimmed mean at 3.6%.
The Australian dollar has been gaining across global FX markets after higher-than-expected Australia July CPI data increased expectations for additional Reserve Bank of Australia interest rate hikes, according to FXStreet.
FXStreet cited annual headline inflation of 3.5% and a trimmed mean of 3.6%, saying the figures have pushed markets to nearly fully price a 25-basis-point hike to 4.60% by year-end.
The outlet noted strategists are split on whether the RBA delivers the next move at its September or November meeting, but July’s inflation impulse has aligned the September decision more closely with a year-end hike scenario.
On the trading side, FXStreet pointed to technical momentum pushing AUD/USD toward multi-week resistance around 0.7200, adding that a close near 0.7165 suggests an elevated daily corridor, with support at 0.7120 and a near-term range of 0.7145 to 0.7180.