The Australian dollar hit a 29-year high against a broadly weaker greenback on Wednesday, while debt futures slumped as the market priced in a bigger chance of a rate hike this year in the wake of stronger-than-expected inflation data.
The Aussie dollar climbed as much as half a cent to $1.0853 after the data showed headline inflation rose 1.6 percent in the first quarter. It last traded at $1.0831, capped by talk of option barriers at $1.09, and ahead of huge barriers tipped at $1.10.
Against the yen, which was briefly dented after Standard & Poor's cut its rating outlook on Japan, the Aussie rose 0.4 percent on the day to 88.42. Against the New Zealand dollar, the Aussie reached one-week highs around NZ$1.3439 on the prospect the RBA may lift rates before its New Zealand counterpart. The kiwi dollar retreated from a three-year high of $0.8110, falling prey to profit-taking ahead of the Fed outcome. It last traded at $0.8061, little changed on the day.
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