AUD Surges on Hawkish RBA Minutes, Inflation Data Looms

The Australian Dollar (AUD) rose on Tuesday as investors interpreted the Reserve Bank of Australia's (RBA) recent meeting minutes as hawkish, indicating a potential interest rate hike. The AUD/USD pair gained over 0.20% to trade at 0.7163, with the Greenback weakening.

According to the RBA's minutes, the bank is focused on tackling inflation and sees upside risks. This has led analysts to believe that if the upcoming Consumer Price Index (CPI) data for July prints in line with expectations, the November RBA meeting will be live, implying a higher chance of a rate hike.

Meanwhile, money markets expect the RBA to keep rates unchanged until the end of the year. However, interest rate futures have priced in 14 basis points of tightening for the December meeting, indicating a 50% chance of a rate hike.