Australian inflation data for July came in higher than projected. The higher inflation figures heightened chances for an interest rate hike by the Reserve Bank of Australia. Leading financial institutions ANZ and CBA revised their interest rate forecasts after the release. Both ANZ and CBA are now predicting a policy rate hike in November. Westpac continues with a separate Reserve Bank of Australia outlook.
The hotter inflation summary and growing rate hike bets pushed the Australian dollar up versus the US dollar. The gain in the exchange rate was triggered by the surprising price data release.