Australian price statistics for July topped market forecasts. The elevated price metrics raised the risk of a policy rate tightening by the Reserve Bank of Australia. Major banks ANZ and CBA adjusted their policy expectations following the report. Both ANZ and CBA are now predicting an interest rate increase in November. Westpac continues with a separate Reserve Bank of Australia outlook.
The stronger price data and climbing policy tightening expectations pushed the Australian dollar up versus the US dollar. The currency rise was triggered by the unanticipated economic report.