AUD/USD Faces Pushback as Forecasters Call Rate Hike Expectations Overpriced

The Australian dollar's recent surge towards 0.72 US cents is facing increasing pushback from forecasters, who warn that markets have overpriced expectations for a Reserve Bank of Australia rate hike.

Santander and Danske are among the brokerages calling for a retracement towards 0.69-0.70 by year-end, with Danske flagging that this level could be reached as early as December.

The central bank's policy path is at the heart of the debate, with the RBA having left the cash rate unchanged in August and minutes from the meeting revealing the board debated a 25-basis-point increase before deciding on no change.