AUD Surges to Four-Month Highs on USD Weakness and Strong Chinese Inflation
The Australian Dollar (AUD) has reached fresh four-month highs against the US Dollar (USD), driven by the USD's weakness and strong Chinese inflation data. The AUD/USD pair touched 0.7237, but quickly retreated to previous ranges around 0.7220.
Economists at DBS note that this week's Consumer Price Index (CPI) data will be crucial for the Federal Open Market Committee (FOMC) meeting next week, as it could determine whether policymakers raise interest rates in September. The inflation print may also decide the outcome of the FOMC meeting.
The AUD is likely to remain limited in its rally due to escalating hostilities in the Middle East and rising oil prices, which are weighing on investors' sentiment. China's consumer inflation data provided some support to the AUD by easing concerns about weak domestic demand.