AUD/USD surges to 0.6580 as soft US CPI boosts risk appetite

AUD/USD climbed 1.2% to 0.6580, reaching a two-week high as softer US inflation data undermined dollar strength and boosted commodity currencies. US CPI rose 2.9% year-over-year in July, below the 3.0% forecast, while core CPI decelerated to 3.2% from 3.3%. The Australian dollar outperformed majors as risk sentiment improved, with iron ore prices also supporting at $105 per tonne. RBA's hawkish stance contrasts sharply with the Fed's expected easing cycle, creating a favorable interest rate differential for the Aussie. Technical momentum turned bullish with RSI breaking above 60, while the pair cleared resistance at 0.6550. Next targets lie at 0.6620 (July high) and 0.6650 (200-day MA). Support has formed at 0.6530, with stronger backing at 0.6500 psychological level. Traders anticipate continued AUD strength if Chinese economic data improves and commodity prices remain elevated.