AUD/USD hit 0.7051 during late Asian trade, the pair's highest since January 8; the pair subsequently consolidated at 0.7028, rising 0.31%.
The pair was likely to find support at 0.6916, Tuesday's low and resistance at 0.7075, the high of January 8.
The Australian Bureau of Statistics reported on Wednesday that the consumer price index rose 0.4% in the fourth quarter, beating expectations for an uptick of 0.3%, after a 0.5% increase in the three months to September.
Year-on-year, consumer prices rose 1.7% in the last quarter, exceeding expectations for a 1.6% gain.
The Fed is expected to keep interest rate on hold at the conclusion of its two-day policy meeting later Wednesday after raising interest rates for the first time in almost a decade in December.
Investors were looking to the Fed policy statement for any indication that the bank is considering slowing the path of interest rate increases this year after recent global financial market turmoil.
The Aussie was higher against the euro, with EUR/AUD sliding 0.35% to 1.5460.