SYDNEY: The Australian dollar hit 15-month highs on Wednesday as a mixed bag of inflation data kept alive the prospect of a near-term hike in interest rates, while helping the Aussie notch a 12-year peak against its counterpart in New Zealand. Figures showed consumer prices were unchanged in November for a second straight month, while the annual pace slowed to 3.4% from October’s alarmingly high 3.8% reading. However, a key measure of core inflation increased by 0.3% from a month earlier and 3.2% for the year, staying stubbornly above the Reserve Bank of Australia’s target band of 2% to 3%. That left everything riding on the full report for the fourth quarter, due later this month, where many analysts assume a rise of 0.9% or more in core inflation could push the RBA to raise rates at its February board meeting. The RBA had already warned that a rise in the 3.6% cash rate might be necessary if inflation did not cool as hoped. “With little spare capacity left in the economy and the labour market still tight, there’s a strong case for the RBA to start tightening policy again before long,” said Marcel Thieliant, head of Asia-Pacific economics at Capital Economics. “If Q4 CPI confirm that trimmed mean inflation overshot the bank’s forecast, we still think it will tighten policy as soon as next month.” Markets imply a 35% chance that the RBA would hike by a quarter point at its meeting on February 3 and a move to 3.85% is almost fully priced in by May. In contrast, futures are priced for at least 50 basis points of easing from the US Federal Reserve this year. The diverging outlook helped the Aussie up to $0.6748, its highest point since October 2024. The break of resistance at $0.6727 opened the way to bull targets at $0.6793 and $0.6943. Broad-based buying from momentum funds also lifted it to an 18-month peak on the Japanese yen at 105.52 and an eight-month top on the euro at 0.5764. It reached a 12-year high on its New Zealand neighbour at NZ$1.1651, while the kiwi lagged behind on the greenback at $0.5782. In the bond market, three-year futures were flat at 95.800, while 10-year yields dipped 3 basis points to 4.747%.