AUD/USD Eyes ISM and NFP as Market Continues to Price in RBA Hikes

Australia's GDP growth remained modest in Q2 at 0.4% q/q and 2.1% y/y, according to recent data.

The details of the report and more recent data suggest that another Reserve Bank of Australia (RBA) hike is still possible, despite the economy not showing signs of overheating.

Household consumption rose 0.4% q/q and 1.8% y/y, contributing 0.2 percentage points to growth.

The RBA's decision will be influenced by more recent data, including a 1.1% m/m increase in July household spending and a 7% y/y rise.

The market is pricing in two additional RBA hikes over the coming year, with one-year OIS rising to around 4.80% against the current 4.35% cash rate.