AUD/USD surges as RBA rate cut odds collapse on hot inflation data

AUD/USD jumped 0.8% to 0.6580 after Australian inflation data significantly exceeded forecasts, effectively eliminating expectations for near-term RBA rate cuts. The quarterly CPI surged to 3.8% year-over-year, well above the 3.4% consensus and outside the RBA's 2-3% target band. Trimmed mean inflation also surprised at 3.5%, reinforcing sticky price pressures. Money markets rapidly repriced, with the probability of a December rate cut plummeting from 65% to just 15%. The strong inflation print suggests the RBA may need to maintain its hawkish stance longer than other major central banks, providing fundamental support for the Australian dollar. Technical indicators show AUD/USD breaking above the 0.6550 resistance level, with next target at 0.6620. The inflation surprise represents a significant shift in RBA policy expectations, potentially establishing a more constructive outlook for the Aussie dollar through early 2025.