Australia Inflation Surges, Hike Risk Repriced as Fuel Costs Soar

Australia's inflation rate jumped higher than expected in July, causing investors to reprice the risk of another interest rate hike from the Reserve Bank of Australia.

The consumer price index rose by 1.0% in July compared to June, exceeding forecasts of a 0.8% increase.

Fuel prices surged 7.5%, while core inflation, or trimmed mean measure, increased 0.5% in the month, its largest gain in a year.

The Reserve Bank held interest rates steady at 4.35% earlier this month after three rate hikes this year aimed at taming inflation.

Several board members had warned that they would hike again if inflation risks build, and minutes from the central bank showed some policymakers judged it 'quite possible' for upside inflation risks to materialize.