AUD Soars on Strong CPI and Rising Interest Rate Hike Risks

The Australian Dollar (AUD) remains strong after a solid performance in July. The Consumer Price Index (CPI) rose 3.5% year-over-year, beating market forecasts of 3.2%. This follows June's 3.8% growth, which has now eased slightly.

Australia's monthly CPI increased by 1.0%, surpassing estimates of a 0.8% rise. The Trimmed Mean CPI, on the other hand, rose 0.5% month-over-month in July and 3.6% year-over-year during the same period.

The Reserve Bank of Australia (RBA) minutes suggest that there is a higher risk of another interest rate hike sooner rather than later. Analysts at MUFG point out that market expectations for Australian policy tightening remain subdued, but the central bank's communication indicates a more immediate risk profile.