Aussie Surges to Three-Month High Amid Hawkish RBA Prospects
The Australian Dollar has reached its highest level in over three months, trading at 0.7217 against the US Dollar during Monday's European session. This strength is attributed to market expectations that the Reserve Bank of Australia (RBA) will hike interest rates later this month following a stronger-than-projected Aussie Q2 Gross Domestic Product (GDP) data release last week.
Analysts at Rabobank note that the Australian economy remains resilient, with the Q2 GDP coming in better than expected. This has likely nailed an RBA rate hike this month.
Strategists at the Commonwealth Bank of Australia believe the Aussie could remain near 72 cents for most of this week, especially if the RBA sounds hawkish. However, on the US Dollar front, it struggles to attract significant bids despite strong August Nonfarm Payrolls (NFP) data and rising Federal Reserve (Fed) bets.
In technical analysis, AUD/USD holds a bullish near-term bias as it extends its advance above the 100-day simple moving average. However, if this level is breached, it could weaken the constructive setup and open the door to a broader corrective phase.