Aussie Dollar Steadies on Strong GDP Data, Rate Hike Odds Rise

The Australian dollar steadied around $0.71 after stronger-than-expected GDP data was released, beating forecasts for 0.3% growth.

The economy expanded 0.4% quarter-on-quarter in Q2, with annual growth accelerating to 2.1%, above expectations for 1.8%.

This suggests that economic activity remains resilient despite the Reserve Bank's efforts to cool demand and curb persistent inflation.

Markets raised the odds of a fourth rate hike at the September meeting to 57% from 48% previously, while a November hike is now more than fully priced in.

The probability of another hike in Q1 2027 also rose to 82% from 62%.