SINGAPORE, Jan 25 (Reuters) – The Australian dollar surged to a more than five-month high on Wednesday after inflation data came in hotter than expected, bolstering the case for further rate increases, while the euro gained on optimism over the euro zone economic outlook.
The Aussie jumped more than 0.8% to $0.7108, its highest level since August, after a shock spike in inflation to a 33-year high last quarter spurred bets that the Reserve Bank of Australia (RBA) would need to continue raising rates.
“Today’s report should quickly eradicate hopes of an RBA pause in February,” said Matt Simpson, senior market analyst at City Index.
“With higher interest likely coming for Australia, China’s reopening and higher base commodity prices, the Australian dollar could be a tough currency to bet against.”
Meanwhile, the kiwi slid nearly 0.6% to $0.6469 earlier in the session and last bought $0.6485, after New Zealand’s annual inflation of 7.2% in…
