Aussie Economy Surges as RBA Hike Bets Reach 76%
Australia's economy has shown a significant improvement in recent weeks, driven by stronger-than-expected economic data. This has led to a surge in expectations for an interest rate hike from the Reserve Bank of Australia (RBA) on September 29.
The RBA's cash rate futures have seen their implied probability rise to 76%, up sharply from less than 10% in late August. Markets are now pricing in more than one full hike by the time the RBA meets again in November, with a one-in-five chance of a second increase at that meeting.
The Aussie dollar has benefited from this economic turnaround and is outperforming against major European currencies. However, AUD/USD remains driven by US rate expectations and risk appetite, making it vulnerable to incoming US data releases.