The Australian dollar edged higher to around $0.659 on Thursday, recouping some losses in the previous session, as reduced bets on domestic policy easing outweighed strength in the US dollar. Investors scaled back expectations for near-term policy easing by the Reserve Bank of Australia after recent data showed Australia’s monthly CPI rose 3.0% in August, the fastest pace in a year and slightly above forecasts of 2.9%. Markets now price only a 6.5% chance of a quarter-point rate cut at next week’s RBA meeting and 38.2% probability of a cut at its subsequent meeting in November. Analysts noted the hotter print reinforced the central bank’s data-dependent stance, keeping the timing of rate cuts uncertain. Meanwhile, the Aussie came under pressure from a stronger greenback after Fed Chair Powell struck a cautious tone on further easing, indicating the need to balance inflation risks with a weakening job market. Attention now turns to Friday’s PCE data, a key gauge on the Fed’s next steps.