AUD Surges as RBA Hike Bets Surge to 76%

The Australian dollar has surged in recent days due to increased expectations for an RBA rate hike. The probability of a rate increase on September 29 jumped to 76%, up from less than 10% in late August, according to cash rate futures.

The improvement in economic data has been significant, with inflation, spending, and GDP all beating expectations. This has added to the tailwind for the AUD, which has also benefited from stronger metals prices.

Despite this, the AUD/USD pair remains a US rates show, driven by the correlation between the Aussie dollar and front and longer-dated US yields. The pair is expected to be influenced by upcoming US data releases, including August payroll numbers on Friday.