Australian Dollar Surges to 12-Week High on Inflation Data

The Australian dollar strengthened against its US counterpart in Asian trading on Wednesday, reaching a 12-week high after data showed hotter-than-expected inflation rates.

The Consumer Price Index rose 3.5% year-on-year in July, exceeding market expectations of 3.3%, and remains above the Reserve Bank of Australia's target range of 2% to 3%.

This has strengthened expectations for an Australian interest rate hike in September, with market pricing now indicating a 36% probability of a 25-basis-point rate increase.