Australian Dollar Hits 15-week High

The Australian dollar broke above $0.72 to a four-month high as expectations of a near-term interest rate hike strengthened, while a weaker US dollar added support. The greenback came under pressure after Federal Reserve Governor Christopher Waller said he would support leaving rates unchanged if inflation pressures continued to ease, prompting investors to trim bets on a Fed rate hike later this month. Traders now await US jobs data due later today for fresh clues on the Fed’s policy outlook. In Australia, stronger GDP data in the second quarter reinforced expectations that the RBA could resume tightening after three rate hikes this year. Markets now price in a 58% chance of a hike this month, up from 49% before, while a November move is fully priced in. Swaps also imply 40 bps of tightening next year, equivalent to one and a half rate hikes. The hawkish outlook was further reinforced by renewed fighting in the Gulf, which pushed oil prices higher and fueled concerns over inflation.

AUDUSD increased to 0.72, the highest since May 2026. Over the past 4 weeks, Australian Dollar US Dollar gained 2.29%, and in the last 12 months, it increased 10.51%.

The Australian dollar held above $0.71, trading near its highest level in more than three months as strong economic growth strengthened the odds of an imminent rate hike, while investors weighed the latest trade figures. The country’s goods trade surplus narrowed to A$1.9 billion in July from a revised A$2.3 billion in June, but remained above expectations of A$1.45 billion, as weaker gold exports and fuel imports drove the decline. Meanwhile, recent data showed the economy held up better than expected in the second quarter, reinforcing expectations that the Reserve Bank of Australia could resume tightening after raising rates three times this year. Markets increased the odds of a hike this month to 58% from 49% before the GDP release, while a move to 4.60% is fully priced for November. The hawkish policy outlook also came as renewed fighting in the Gulf pushed oil prices higher and raised concerns over inflation.