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Australian dollar rises toward 0.7220 as rate hike bets grow
AUD/USD gained 0.22% to about 0.7220 after better-than-expected Australian GDP data supported expectations for an RBA rate hike later this month.
FXStreet reports that AUD/USD climbed on Monday, gaining 0.22% to trade around 0.7220, its highest level in more than three months.
The Australian dollar was supported by growing expectations that the Reserve Bank of Australia could raise interest rates at its policy meeting later this month. Those bets were reinforced by Australian GDP data released last week, with growth of 0.4% QoQ and 2.1% YoY in the second quarter, which exceeded market expectations.
Analysts at Rabobank said the economy appears resilient enough that the latest GDP figures could effectively lock in an RBA rate hike this month. Investors are also looking ahead to comments from RBA Deputy Governor Andrew Hauser in an interview with ABC on Tuesday, with any renewed inflation concern potentially strengthening the rate-hike outlook.
Meanwhile, the US dollar struggled to gain despite stronger US labor-market data, with August Nonfarm Payrolls exceeding expectations. FXStreet said the resilience of AUD/USD underscores how the market is currently prioritizing expectations for tighter monetary policy in Australia over the US figures.