AUD Extends Gains as Inflation Beats Expectations, Eyes US PCE

The Australian Dollar continued its upward trend on Wednesday after the release of consumer inflation figures. The AUD/USD pair rose to the 0.7170 area, its highest level since early June, as traders looked to the US Personal Consumption Expenditures (PCE) Price Index for further cues.

The Australian Bureau of Statistics reported a year-over-year increase in the Consumer Price Index (CPI) of 3.5% in July, beating the consensus estimate of 3.2%. This reading left room for further policy tightening by the Reserve Bank of Australia, which provided a modest lift to the Aussie.

The US Dollar struggled to attract buyers amid declining US bond yields and hopes for improved relations between the US and Iran. Investors may wait for the release of the US PCE before making fresh directional bets on the USD and AUD/USD pair.