AUD/USD Strengthens as RBA Hike Bets Soar to 76%

The Australian dollar has been gaining strength as expectations for an RBA rate hike surge to 76%.

This increase in RBA pricing is largely due to stronger-than-expected economic data, including inflation, spending, and GDP figures that have beaten market expectations.

The improved local data pulse is also reflected in Citi's Economic Surprise Index, which has flipped positive at +10.1 after a dramatic turnaround from its low point in July.

Australia is not alone in seeing an improvement in economic data relative to expectations, but the RBA's decision to hike interest rates may be seen as a response to 'the right reasons' due to robust demand and inflationary pressure generated by energy price spikes.