Australian Dollar: RBA hike repricing supports gains – DBS
DBS Group Research’s Philip Wee notes AUD/USD has risen 2.2% in August after a 1.5% gain in July, leaving the Australian Dollar near year-to-date highs and the best-performing G10 currency in 2026.
DBS Group Research's Philip Wee highlights that the Australian Dollar (AUD) has experienced a 2.2% increase in August following a 1.5% rise in July, positioning it near year-to-date highs and as the top-performing G10 currency in 2026. This surge is attributed to the rapid repricing of the Reserve Bank of Australia's (RBA) rate hike in November, driven by hawkish minutes and July CPI inflation data.
AUD/USD reached 0.7178, surpassing the 0.70 level from the June 17 FOMC meeting. The Oz currency maintains the highest policy rate among G10 currencies, with the most recent RBA rate hike repricing occurring swiftly, following Tuesday's hawkish August minutes and the ongoing inflation risks. July's CPI data revealed that headline inflation was 3.5% YoY, exceeding expectations of 3.3%, while the trimmed mean inflation remained steady at 3.6%.
For AUD/USD to surpass the 0.6833 to 0.7278 range established after Operation Epic Fury, external factors are required. These factors include the currency recovery across Asia's largest export markets, particularly for CNY, KRW, and JPY, and a weakened USD amidst evolving concerns about aggressive Fed hike expectations following the US Treasury's bond buybacks.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
