AUD Surges Ahead of Inflation Data, RBA Rate Hike Odds Rise

The Australian dollar strengthened to around $0.70, nearing multi-week highs as investors await inflation data this week for clues on the Reserve Bank's policy outlook.

The second-quarter CPI report is due out Wednesday and is expected to show core inflation rose 0.9% in the quarter, lifting the annual rate to 3.7% from 3.5%. This reading would remain above the RBA's target range of 2%-3%, reinforcing bets that policymakers will maintain a tightening bias.

Markets imply a 40% chance the RBA will raise the cash rate in August, with a move by November almost fully priced.