AUD strengthened against other major currencies in the European session on Wednesday as investors continued to digest Australia’s consumer price index (CPI) data for May, which showed a stronger-than-expected rebound in inflationary pressures.
The Australian Bureau of Statistics (ABS) reported that consumer prices surged 4.0% YoY last month, the highest level in six months, accelerating from +3.6% YoY in April. Economists had forecast a 3.8% YoY soar. Meanwhile, the Reserve Bank of Australia’s preferred inflation measure - the trimmed-mean CPI - climbed to 4.4% YoY in May from 4.1% YoY in the previous month.
The hotter-than-anticipated inflation data raised concerns the RBA is not to start cutting its interest rates soon but, instead, might hike them again (for the 14th time).