AUD Surges on Hawkish RBA Minutes as Focus Shifts to Inflation Data

The Australian Dollar (AUD) gained strength against major peers after the Reserve Bank of Australia's (RBA) meeting minutes revealed a more hawkish stance than expected.

The RBA's board minutes from its February meeting indicated that policymakers considered another rate hike before deciding to hold, citing uneven progress on inflation and significant risks of it staying above target for longer.

This assessment was perceived as less dovish than market expectations, prompting a repricing of near-term rate cut bets. Money markets pared back the probability of a rate cut in coming months, supporting the AUD/USD pair's move higher.

The focus is now on the Australian Bureau of Statistics' quarterly Consumer Price Index (CPI) data, scheduled for release later this week. A hotter-than-expected CPI print could solidify the case for the RBA to maintain its restrictive policy stance for an extended period or consider another hike, providing further support for the AUD.