AUD Stays Firm vs USD Amid China Inflation Data

The Australian Dollar (AUD) remains strong against the US Dollar (USD) on Wednesday after China's inflation data was released. The AUD/USD pair is trading around 0.7220-0.7225, just below its highest level since May 14. Despite China's Consumer Price Index (CPI) rising 0.8% year-over-year in August, the Australian Dollar has not seen a significant boost.

Markets are pricing in a higher chance of interest rate hikes by the Reserve Bank of Australia (RBA) later this month due to stronger-than-expected economic growth and domestic inflation. This is supporting the Australian Dollar while the US Dollar remains depressed near its lowest level in over two weeks.