Australian Dollar Surges on Rate Hike Bets Amid Strong Inflation Data

The Australian dollar held near 12-week highs on Thursday after strong inflation and spending data fueled bets of an imminent rate hike. The Aussie rose 0.2% to $0.7184, having hit a 12-week top of $0.7189 overnight before paring gains.

Resistance lies at $0.7200 and $0.7277, while support is around $0.7110 and $0.6920. The Reserve Bank of Australia's (RBA) decision to hold interest rates steady at 4.35% for a second meeting this month has done little to calm market expectations.

Australia's household spending jumped 1.1% in July, data showed on Thursday, suggesting consumer demand remained resilient despite higher borrowing costs.

Citi and the National Australia Bank have forecast a rate hike in September, citing resilient household spending and persistent inflation. The RBA has warned of even higher rates if inflation risks materialise.