The Australian dollar strengthened against other major currencies in the Asian session on Wednesday, as the nation\'s inflation accelerated more than expected in May, suggesting the Reserve Bank of Australia will remain hawkish at the August meeting.
Data from the Australian Bureau of Statistics showed that the consumer price inflation rose to 4.0 percent in May from 3.6 percent in April. Inflation was expected to rise to 3.8 percent.
Annual trimmed mean inflation accelerated to 4.4 percent in May from 4.1 percent in April. The most significant contributors to the annual increase were housing, food and non-alcoholic beverages, transport and alcohol and tobacco prices.
Markets bet on the possibility for slashing interest rates only in the first quarter of 2025 rather than in the last quarter of this year.
Asian stock markets are trading mostly higher, following the mixed cues from Wall Street overnight, as traders remained cautious ahead of the release of some crucial economic data form the U.S., including a report on personal income & spending due later in the week. The data will provide clues about the outlook for the U.S. Fed\'s monetary policy moves.
In the Asian trading today, the Australian dollar rose to a 17-year high of 106.89 against the yen and a 1-year high of 1.6004 against the euro, from yesterday\'s closing quotes of 106.11 and 1.6117, respectively. If the aussie extends its uptrend, it is likely to find resistance around 108.00 against the yen and 1.59 against the euro.
Against the U.S., the Canada and the New Zealand dollars, the aussie advanced to a 2-week high of 0.6689, a 6-day high of 0.9135 and more than a 1-month high of 1.0932 from yesterday\'s closing quotes of 0.6645, 0.9074 and 1.0853, respectively. The aussie may test resistance near 0.67 against the greenback, 0.92 against the loonie and 1.10 against the kiwi.
Looking ahead, the Confederation of British Industry\'s distributive trades survey data for June is due to be released at 6:00 am ET in the European session.
In the New York session, U.S. weekly mortgage approvals data, new home sales data for May and U.S. EIA weekly crude oil data, Canada manufacturing and wholesale sales data and Swiss National Bank\'s quarterly bulletin are slated for release.