AUD/USD Surges 1.2% to 0.6820 Ahead of Critical Australian CPI Release

The Australian dollar posted sharp gains against the USD, climbing 1.2% (80 pips) to 0.6820 in Monday's Asian session, marking its highest level since early August. The surge combines broad USD weakness following Powell's dovish Jackson Hole speech with anticipation ahead of Wednesday's Australian CPI data. Markets expect headline inflation to moderate to 3.4% YoY from 3.8%, potentially keeping the RBA on hold at 4.35%. The AUD also benefits from improved risk sentiment and stable commodity prices, with iron ore holding above $100/ton. Technical momentum appears strong, with AUD/USD breaking above the 200-day moving average at 0.6780 and eyeing resistance at 0.6850. A softer-than-expected CPI print could cap gains as it would reduce pressure for further RBA tightening. However, the prevailing USD weakness and positive risk environment suggest dips may find buyers, with support established at 0.6750.