AUD/USD Price Forecast: Hot Australian CPI Data Boosts Hawkish RBA Bets

Lead: Supported by Australia's higher-than-expected Consumer Price Index (CPI) data, the Australian dollar strengthened against the US dollar during early European trading on Wednesday, with market bets on further monetary policy tightening by the Reserve Bank of Australia (RBA) heating up.

**Inflation Data Ignites Rate Hike Expectations**

The latest Australian CPI data came in hot, directly fueling market expectations that the RBA will maintain a hawkish stance. The data showed inflation pressures remain stubborn, prompting traders to increase bets on potential further rate hikes by the RBA. Against this backdrop, the Australian dollar garnered strong buying support, outperforming its major currency counterparts. According to market reports, following the data release, the AUD/USD pair rose for a second consecutive trading day and briefly targeted multi-month highs.

**Exchange Rate Climbs to Key Zone**

As a result, the AUD/USD pair gained approximately 0.2% during early European trading, having previously approached the 0.7180 level. However, based on the latest real-time quotes, the pair is currently trading near 0.71834, still holding at relatively recent highs. Market analysts noted that the hot inflation report is the core factor driving the exchange rate higher, as it keeps the RBA's rate hike options on the table, contrasting with expectations that other major central banks may pause or end their tightening cycles.

**Market Focus Shifts to US PCE Data**

Despite the Australian dollar's strong short-term momentum, market attention is gradually shifting toward the upcoming US Personal Consumption Expenditures (PCE) price index. This data is a key inflation gauge for the Federal Reserve and could significantly impact the US dollar's trajectory. Some analysts suggest that if US PCE data comes in higher than expected, traders may increase their rate hike bets on the Fed, potentially driving a US dollar rebound and limiting further upside for AUD/USD; conversely, softer data could pressure the US dollar, providing an opportunity for the Australian dollar to break through key resistance levels.