AUD Surges to Three-Month High as Rate Hike Expectations Intensify

The Australian Dollar (AUD) reached its highest level in over three months on Monday, trading around 0.7220 after a 0.22% gain on the day.

This increase is largely due to growing expectations that the Reserve Bank of Australia (RBA) will raise interest rates at its upcoming policy meeting later this month.

Australia's GDP data released last week showed a stronger-than-expected growth rate, with the economy expanding by 0.4% quarter-over-quarter and 2.1% year-over-year in the second quarter.

Rabobank analysts believe that the Australian economy is resilient enough to support an RBA rate hike this month, which would reinforce the monetary policy divergence supporting the AUD.