Australia’s July inflation exceeds expectations at 3.5%, boosting the Australian dollar and increasing pressure on the central bank to raise interest rates

(1) Australia's July CPI annual rate unexpectedly rose to 3.5%, higher than economists' forecast of 3.3%, indicating that inflationary pressures remain stubborn and tilted to the upside. (2) The stronger-than-expected data confirms the Reserve Bank of Australia's recent meeting minutes, which highlighted elevated inflation risks. Market attention on further policy tightening before the end of the year is expected to intensify again. (3) Supported by the relative interest rate environment, the Australian dollar received a boost. State Street Global strategists pointed out that the debate on tightening monetary policy will continue to be a market focus, and the Australian dollar is expected to maintain a relatively strong tone in the short term.