Australian dollar holds above $0.71 near 3-month highs
The AUD stayed above $0.71 near a more-than-three-month high as strong growth lifted rate-hike odds. July’s goods trade surplus narrowed to A$1.9 billion but stayed above A$1.45 billion expectations.
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.