The Australian dollar rose in Asian trading on Wednesday against a basket of global currencies, moving into positive territory for a second consecutive day against its US counterpart and approaching its highest level in several weeks, following the release of stronger-than-expected inflation data in Australia.

The data indicates that persistent inflationary pressures remain in place for policymakers at the Reserve Bank of Australia, reinforcing expectations of an Australian interest rate hike in March.

Price Overview

The Australian dollar exchange rate today: the Australian dollar rose against the US dollar by 0.7% to 0.7110, up from the opening level of 0.7061, while recording a session low of 0.7057.

The Australian dollar ended Tuesday’s trading up by around 0.1% against the US dollar, marking a third daily gain within the past three sessions, supported by the recovery in global equity markets.

Inflation in Australia

Data released on Wednesday by the Australian Bureau of Statistics showed that the headline consumer price index rose by 3.8% year-on-year in January, above market expectations of a 3.7% increase, matching the 3.8% reading recorded in December.

Australian inflation came in above expectations in January.

These figures indicate that inflation remains above the Reserve Bank of Australia’s medium-term target range of 2% to 3%, strengthening the case for continued normalization of monetary policy and further interest rate increases.

Reserve Bank of Australia Governor Michele Bullock said earlier that inflation remains too high and cannot be allowed to get out of control, adding that there are concerns about the persistence of elevated inflation levels.

Australian interest rates

Following the above data, market pricing for a 25 basis point interest rate hike by the Reserve Bank of Australia in March rose from 50% to 60%.

Pricing for a 25 basis point rate hike in May also increased from 80% to 95%.

Investors are now awaiting additional data on inflation, unemployment, and wage growth in Australia to reassess these expectations.

China has achieved a historic milestone in the energy sector, as its electricity generation capacity from clean energy sources has exceeded fossil fuel capacity for the first time ever, driven by a decade-long boom in solar and wind power investment.

According to data tracked by Global Energy Monitor, 52% of China’s operational power generation capacity came from non-fossil sources as of February 2026, while 48% of installed capacity still relies on fossil fuels.

For years, China — the world’s largest carbon emitter — has led global clean energy investment, installing more solar and wind capacity than the rest of the world combined.

China’s clean energy capacity, including nuclear and hydropower, is expanding at a record pace as the world’s second-largest economy seeks to rely more on domestic energy sources to meet rising electricity demand, supported by a massive supply chain for solar panels and batteries.

Despite the green transition… coal remains dominant

However, Beijing continues to rely on coal as well, with coal power capacity additions in 2025 reaching their highest level in a decade.

China operates the world’s largest coal-fired power fleet and accounts for 71% of global coal capacity currently under development, according to the organization’s data.

China is leading growth in both renewable energy and coal at the same time to meet increasing electricity demand, meaning the clean energy boom has not made the coal sector irrelevant.

This strategy is partly driven by energy security concerns, as China continues building coal plants to avoid power shortages and factory shutdowns during peak demand periods or dry seasons that affect hydropower generation.

Data shows China has up to 674 gigawatts of non-fossil power capacity under construction, compared with 237 gigawatts of fossil fuel capacity under construction.

Of the total non-fossil capacity under construction, solar power leads all other energy sources, with utility-scale solar projects reaching 234 gigawatts — a capacity larger than that of the rest of the world combined.

Coal remains a major pillar of China’s energy mix

Despite clean energy dominating new expansion, coal remains a key source of electricity generation to ensure grid stability and prevent power outages during periods of high demand or hydropower shortfalls caused by drought.

As of January 2026, China had 1,243 gigawatts of operational coal-fired power capacity, with another 501 gigawatts under development, although not all projects are expected to be completed.

Over the past decade, China added 362 gigawatts of operating coal capacity.

China’s coal plant construction cycle reached peak levels last year, with 78 gigawatts of coal capacity coming online in 2025 — the highest annual figure in a decade — even as coal power generation declined, since clean energy covered all net growth in electricity demand.

New and reactivated coal project proposals also rose to a record 161 gigawatts, representing 13% of current operational capacity.

Analysts warned that proceeding with these projects could lock China into additional years of coal expansion beyond both energy demand growth and climate requirements.

China leads global energy transition investment

China remains the largest market for energy transition investment, with spending reaching about $800 billion out of a global total of $2.3 trillion in 2025, according to a BloombergNEF report.

The report added that China continues to represent the majority of global energy supply chain investment, a trend expected to continue for at least the next three years.

Ultimately, China is not abandoning one energy source in favor of another. Instead, it is expanding domestic industries to accelerate renewable energy while continuing to rely on coal as a foundational source to ensure electricity grid stability.

US stocks rose on Tuesday, driven by gains in Advanced Micro Devices shares and software stocks, as investor concerns eased over the disruptive impact of artificial intelligence on certain industries.

The S&P 500 climbed 0.8%, while the Nasdaq Composite advanced 1.1%. The Dow Jones Industrial Average added 416 points, or 0.9%, supported by a 3% rise in Home Depot shares after the company reported earnings that exceeded expectations for the first time in a year. The recovery in IBM — which had fallen sharply in the previous session due to AI-related concerns — also helped support Dow gains.

AMD surged 10% after Meta announced a multi-year agreement with the semiconductor company. The partnership involves deploying up to 6 gigawatts of AMD graphics processing units (GPUs) in AI data centers. Meta will also invest in AMD through a performance-based warrant agreement allowing it to purchase up to 160 million shares.

The move follows Meta’s announcement last week that it is using millions of Nvidia chips in its data center expansion plans. Nvidia shares rose 1%.

DocuSign was also among the gainers, climbing 4% after Anthropic announced that its “Claude Cowork” tool can now integrate with DocuSign, in addition to other enterprise tools such as Google Drive and Gmail. The announcement gave investors optimism that artificial intelligence could complement software companies rather than replace them.

This optimism extended across other software names. Salesforce — which also collaborates with Anthropic — rose 4%, while ServiceNow gained 2%. The iShares Expanded Tech-Software Sector ETF (IGV) advanced 3%, although it remains more than 30% below its 52-week high.

Anshul Sharma, Chief Investment Officer at Savvy Wealth, told CNBC: “It seemed to me that the market was adopting a sell-first, ask-questions-later mindset. That approach persisted for some time, which is why even enterprise software companies came under significant pressure.” He added that today’s moves represent a “classic rebound after a selloff.”

Sharma also said he is not fully convinced by the recent Wall Street narrative suggesting that artificial intelligence will quickly replace much of enterprise software.

He said: “From a legal-risk perspective, it is unrealistic to think large companies would suddenly abandon enterprise software — which is proven, tested, and aligned with their risk management standards — and build internal alternatives in the next few months or quarters.” He added that the recent decline in software stocks was an overly immediate reaction.

Copper prices rose during Tuesday trading despite the US dollar holding steady against most major currencies and despite an increase in inventory levels at the London exchange.

Trading activity in metals increased following the end of the public holiday in China, the world’s largest consumer of metals.

The most actively traded copper contract on the Shanghai Futures Exchange gained 0.8% to 101.51 thousand yuan ($14,728.88) per ton, according to Reuters.

Data released today showed that copper inventories in warehouses registered with the London Metal Exchange rose by 1,350 tons to reach 243,175 tons, the highest level since March 2025, after climbing 71% since the beginning of the year.

Meanwhile, the dollar index held stable in positive territory at 97.7 points at 16:51 GMT, recording a session high of 97.9 and a low of 97.7.

During US trading hours, May copper futures rose by 2.2% to $5.97 per pound at 16:45 GMT.