AUD Gains Ahead of Key Inflation Report

The Australian dollar (AUD) is gaining ahead of Australia's key inflation report, which is due to be released at 11.30am AEST today.

Market analysts expect the headline inflation rate to come in at 3.3% year-on-year and trimmed mean inflation at 3.5%, with a slight possibility that the latter could be lower, potentially weighing on the AUD/USD exchange rate.

A strong reading could reinforce expectations of further interest rate hikes by the Reserve Bank of Australia (RBA), with markets currently assigning a 70% probability of a rate increase at the February 2027 meeting.