AUD Surges as RBA Minutes Reveal Hawkish Stance Ahead of CPI Data

The Australian Dollar (AUD) strengthened against major peers on Tuesday after the Reserve Bank of Australia's (RBA) meeting minutes revealed a more hawkish-than-anticipated stance. The RBA's board minutes from its February meeting indicated that policymakers considered another rate hike before ultimately deciding to hold.

The board noted that while progress on inflation is being made, it remains uneven, and the risks of it staying above the target band for longer are significant. This assessment was perceived as less dovish than market expectations, prompting a repricing of near-term rate cut bets.

Money markets reacted by paring back the probability of a rate cut in the coming months, a shift that typically supports a currency by improving its yield appeal. The AUD/USD pair moved higher, breaking above a key resistance level, as the dollar softened against a basket of currencies.