AUD Gains on Expectations of Another RBA Hike

Australia's currency, AUD, has seen an uptick in value due to expectations of another interest rate hike by the Reserve Bank of Australia (RBA).

This comes after a stronger-than-expected Consumer Price Index (CPI) release and resilient household spending.

According to OCBC FX Strategist Sim Moh Siong, markets have fully priced in an additional 25 basis point hike by the end of 2026, up from around a 55% probability previously.

The RBA is likely done tightening, but sticky inflation means another hike cannot be ruled out, which has supported the AUD over the next one to two quarters.