Aussie Hits Parity with Loonie Amid RBA Rate Outlook Shift

The Australian dollar has hit parity with its Canadian counterpart for the first time in over eight years. The Aussie reached C$1.0004 on Wednesday, climbing 0.2% overnight to a new high of C$1.0012.

This shift is largely due to the Reserve Bank of Australia's (RBA) rate outlook, which has become increasingly hawkish. With a fourth hike this year all but locked in, the RBA is expected to raise rates again next month to 4.6%.

In contrast, the Bank of Canada has lagged behind the global tightening cycle, holding rates steady at 2.25% for nearly a year. Despite an even chance that it could lift rates next month, there are doubts about its ability to do so.