Australian Dollar Hits Three-Month High on Rate Hike Bets

The Australian Dollar has reached a three-month high as expectations of an interest-rate hike in Australia intensify. Stronger-than-expected growth data, which showed the economy expanded by 0.4% QoQ and 2.1% YoY in the second quarter, has reinforced expectations that policymakers could tighten monetary policy later this month.

The US Dollar is struggling to benefit from stronger US employment data as traders maintain expectations of further monetary easing. The AUD/USD advanced on Monday, gaining 0.22% on the day to trade around 0.7220 at the time of writing.

Rabobank analysts consider the Australian economy sufficiently resilient for the latest GDP figures to likely seal an RBA rate hike this month, reinforcing the monetary policy divergence supporting the Australian Dollar.