Aussie dollar climbs to three-year high before easing slightly, inflation up 0.6%; details inside

The Australian dollar witnessed a sharp rise on Wednesday (Jan 28, 2026), hitting a three-year high against its US counterpart. According to the Australian Associated Press, further gains appear to be in store following reports that Australians are considering international travel.

The Aussie climbed to its highest level since February 2023. The dollar hit 70.1 US cents on Wednesday morning after a 1.4 percent jump. After soaring to a record high, it fell 0.2% to 69.97 US cents, according to ABC. As the Aussie rallied, the US dollar reportedly lost eight percent of its value on fears of tariffs. It’s apparently a four-year low.

Meanwhile, Australia’s consumer price inflation rose at a faster year-on-year pace in the December quarter, data showed on Wednesday. According to Reuters, core inflation climbed above forecasts, boosting bets on near-term interest rate hikes.

The Australian Bureau of Statistics’ Consumer Price Index (CPI) rose 0.6% in the fourth quarter, in line with forecasts. Year-on-year CPI inflation accelerated to 3.6% from 3.2%, partly due to the comparison base and the impact of energy rebates, Reuters reported. The

The key reduced average rate of core inflation rose 0.9% in the quarter, beating forecasts of a 0.8% rise and unwelcome news for the Reserve ‍Bank of Australia⁠, which had expected something around 0.75%. The annual rate rose to 3.4% from 3.0%, well above the RBA’s target band of 2% to 3%.