AUD Reaches Three-Month High Amid RBA Hawkish Prospects

The Australian Dollar has reached a three-month high due to expectations of an interest rate hike by the Reserve Bank of Australia (RBA). Analysts at Rabobank believe that the RBA will raise rates this month after the country's Q2 GDP came in stronger than expected, at 0.4% q-o-q and 2.1% y-o-y.

Rabobank analysts note that the Australian economy remains resilient, despite some uncertainty surrounding global trade tensions and Brexit. Strategists at the Commonwealth Bank of Australia expect the Aussie to remain near 72 cents for most of this week, especially if RBA Deputy Governor Andrew Hauser sounds hawkish in his comments.

In contrast, the US Dollar is struggling to attract significant bids despite strong Nonfarm Payrolls data and a potential September rate hike by the Federal Reserve. Analysts at Commerzbank believe that the employment report has revived expectations for a 25bp interest rate hike on September 16, with a probability of 62% compared to 51% before.

The AUD/USD pair holds a bullish near-term bias as it extends its advance above the 100-day simple moving average at 0.7079. The Relative Strength Index (RSI) is around 68, hinting that bullish momentum is strong but may be approaching a consolidation phase.