Australian inflation data for July topped market forecasts. The higher inflation figures increased the likelihood of a borrowing cost increase by the Reserve Bank of Australia. Major banks ANZ and CBA changed their rate predictions following the report. Both ANZ and CBA currently project a policy rate hike in November. Westpac holds a different Reserve Bank of Australia policy perspective.
The hotter inflation summary and climbing policy tightening expectations lifted the Australian dollar up relative to the US dollar. The gain in the exchange rate came after the surprising price data release.