The Australian dollar rose broadly in European trading on Wednesday against a basket of major currencies, extending gains for the sixth consecutive session versus the US dollar and hitting a three-week high. The currency has become one of the most attractive investment opportunities in the forex market following hotter-than-expected inflation data from Australia.

The strong inflation figures renewed pressure on policymakers at the Reserve Bank of Australia (RBA) and sharply reduced expectations for a rate cut at the November meeting.

Price Outlook

• AUD/USD climbed 0.4% to 0.6608 — its highest since October 9 — up from the opening level of 0.6583, after touching an intraday low of 0.6579.

• The pair ended Tuesday up 0.45%, marking its fifth straight daily gain, supported by positive trade developments between the US and China.

Inflation in Australia

Data from the Australian Bureau of Statistics on Wednesday showed that consumer prices rose 1.3% in the third quarter — the fastest pace since Q1 2023 and above market expectations of 1.1%, following a 0.7% increase in Q2.

On a monthly basis, headline CPI rose 3.5% year-on-year in September, the highest since July 2024, exceeding expectations of 3.1% and up from 3.0% in August.

Australian Inflation Hits 14-Month High

The figures confirm that inflation is accelerating again and remains above the RBA’s 2–3% medium-term target range, lowering the likelihood of further rate cuts this year.

Interest Rate Outlook

• Following the data, market pricing for a 25-basis-point RBA rate cut in November dropped from 70% to just 25%.

• The RBA held rates at 3.60% in September after three reductions earlier this year, awaiting more economic data before taking further action.

Analyst Views

Adam Boynton, Head of Australian Economics at ANZ Bank, said: “If the economy proves materially weaker than expected, the RBA retains the option to ease policy in December, but the bar for any cut this year is now very high.”

He added: “We expect the most likely path to be a final 25-basis-point cut in the first half of 2026, though there’s a risk that our February call could be delayed — or may not happen at all.”

Apple and Microsoft shares climbed on Tuesday, pushing each company’s market capitalization above the $4 trillion mark — a historic milestone for America’s technology titans.

Despite the gains, both firms still trail Nvidia, currently the world’s most valuable company, with a market cap exceeding $4.6 trillion. Microsoft first hit the $4 trillion level in July.

Microsoft shares rose nearly 3% after confirming it had completed the acquisition of a 27% stake in OpenAI’s for-profit entity, deepening its partnership that began in 2019.

Apple, meanwhile, reached this achievement for the first time in its history, driven by robust sales of the iPhone 17 series launched in September, which has outperformed previous models.

Apple’s stock has gained 25% over the past three months, with its fiscal fourth-quarter earnings due Thursday, while Microsoft is set to report on Wednesday.

J.P. Morgan analyst Samik Chatterjee wrote Monday that “Apple shares are heading into earnings with their strongest positive momentum in a year,” raising his price target to $290 with an “Overweight” rating.

Chatterjee also noted that Apple successfully avoided major tariff-related disruptions under the Trump administration by shifting much of its US-bound supply chain to India and Vietnam, while maintaining cooperative ties with Washington on domestic manufacturing.

“The announcement of increased local investment, combined with the rapid shift of production outside China (to India and Vietnam), has improved Apple’s position under the current tariff environment,” he wrote.

The Role of Artificial Intelligence

The year 2025 has been remarkable for Big Tech. From breakthroughs in artificial intelligence to steady growth in core operations, companies such as Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla now make up roughly one-third of the total market value of the S&P 500.

This dominance has attracted investors seeking firms with strong balance sheets, recurring revenues, and early leadership in AI. From Microsoft’s Azure cloud and Copilot suite to Apple’s deepening integration of AI into its devices — alongside Google’s Gemini and Meta’s Llama models — each is a pillar of the expanding AI ecosystem, spanning infrastructure to applications.

Nvidia was the first to break the $4 trillion barrier, thanks to its lead in AI chips. But Apple and Microsoft are rapidly closing in, doubling down on AI investments using their enormous cash reserves — betting the technology will transform both software and consumer hardware.

Analysts say reaching this symbolic threshold underscores the growing dominance of these firms, with even small price movements in their shares capable of shifting entire market indices.

Both companies face an immediate test this week as they report earnings, with investors looking for concrete evidence that AI is driving revenue growth — and whether the recent rally still has room to run.

“iPhones account for more than half of Apple’s revenue and profit, and every additional device sold brings users deeper into its ecosystem,” said Chris Zaccarelli, Chief Investment Officer at Northlawn Asset Management.

Apple shares had struggled earlier this year amid fierce competition in China and concerns over US tariffs’ impact on Asian economies, including China and India, where its manufacturing base is concentrated.

However, the company’s latest models — from the iPhone 17 to the iPhone Air — have drawn customers back to stores from Beijing to Moscow within weeks of launch, even as Apple absorbed higher import costs.

Data from Counterpoint Research showed iPhone 17 sales outpacing its predecessor by 14% in the US and China. Evercore ISI expects Apple to surpass market forecasts for the September quarter and issue an upbeat outlook for year-end.

Apple is now the third company in history to achieve a $4 trillion market cap, following Nvidia and Microsoft. Nvidia’s current valuation exceeds $4.5 trillion.

Apple’s stock trades at 33.2 times its expected 12-month earnings, compared with 27.4 times for the Nasdaq 100 index, according to LSEG data.

Despite gaining about 7% year-to-date, Apple’s performance still lags the tech-heavy Nasdaq, which has risen roughly 22% over the same period.

US stock indexes climbed to fresh record highs on Tuesday as investors awaited a packed week of corporate earnings, the start of the Federal Reserve’s policy meeting, and renewed trade discussions between Washington and Beijing.

Several major tech companies — including Alphabet, Amazon, Apple, Meta, and Microsoft — are set to report earnings this week, which could provide further direction for the market.

The Federal Reserve’s two-day meeting begins later today, with a rate decision expected on Wednesday. Markets broadly anticipate a 25-basis-point rate cut, marking the second consecutive reduction this year.

As of 16:08 GMT, the Dow Jones Industrial Average rose 0.5% (256 points) to 47,800, the S&P 500 gained 0.1% (9 points) to 6,884, and the Nasdaq Composite advanced 0.4% (85 points) to 23,718.

Palladium prices declined on Tuesday as markets tracked developments in trade talks between the United States and China, while also awaiting the Federal Reserve’s policy meeting later this week.

According to Capital.com, palladium has surged around 26% since the start of October to nearly $1,500 per ounce, a rally that has coincided with gains in the platinum market and looser global financial conditions.

Bets on lower US interest rates and a weaker dollar have further fueled the metal’s rise as part of what analysts describe as the ongoing “gold + liquidity wave” that has lifted precious metals broadly.

Palladium is used almost exclusively in catalytic converters for gasoline engines, meaning US automakers and electronics manufacturers could face heightened cost volatility.

Technical analysis from Monex identifies a resistance zone between $1,500 and $1,520 per ounce, with expectations that the overall trend will remain upward but volatile in the near term.

Analysts at CPM Group noted that palladium’s recent strength is “closely tied to platinum’s performance,” while cautioning that persistent inflation and a softening US labor market could pose headwinds to demand growth.

Meanwhile, the US dollar index edged up less than 0.1% to 98.7 by 15:18 GMT, hitting a session high of 98.9 and a low of 98.5.

As for trading, December palladium futures fell 0.8% to $1,420.5 per ounce at 15:19 GMT.