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Australian dollar breaks barrier as greenback loses shine

Australia’s dollar briefly broke above 70 US cents after hotter inflation lifted rate-hike expectations, then slipped back.

By AAP & CBA Newsroom

28 January 2026

A US dollar note and Australian dollar coin. Credit: AAP

Key points

  • AUD jumped to 70.22 US¢ on the CPI release — first time above 70 US¢ since early 2023.
  • It later eased to about 69.86 US¢, still up on Tuesday’s ~69.15 US¢.
  • Inflation lifted to 3.8% to December (from 3.4% to November); trimmed mean was 0.9% for the quarter.
A graphic shows the price of the Australian Dollar compared to the US Dollar , Tuesday, January 27, 2026. (AAP Image/Susie Dodds) NO ARCHIVING

Australia's currency hit a near three-year high against its American counterpart after sticky inflation data raised the odds the Reserve Bank will soon raise interest rates.

The Aussie jumped from 69.93 US cents to 70.22 US cents in just two minutes late Wednesday morning immediately after the release of the consumer price index readout.

It's the first time the Aussie had breached 70 US cents since early 2023.  

By mid-afternoon the Aussie had retreated a little, changing hands at 69.86 US cents, up from 69.15 US cents late Tuesday afternoon.

In a graphic made on Wednesday, January 28, 2026, Australian inflation data. (AAP Image/Joanna Kordina) NO ARCHIVING

Surprise inflation jump

Australian Bureau of Statistics report showing consumer prices climbed 3.8 per cent in the year to December, up from 3.4 per cent in the 12 months to November, with trimmed mean inflation coming in at 0.9 per cent for the December quarter.

Foreign exchange values are exquisitely sensitive to interest rate expectations, because higher rates make it more valuable to hold a nation's currency.

Even before Wednesday's move the Aussie had been at a nearly 16-month high against its faltering American counterpart.

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Some of the content presented in this section has been provided by Australian Associated Press (AAP). Commonwealth Bank of Australia (CommBank) is not responsible for the accuracy, quality, reliability, or completeness of AAP information or any linked websites. This material is published for general information purposes only.