Driven by a weaker U.S. dollar and market expectations of rate hikes by the Reserve Bank of Australia (RBA) next year, the Australian dollar reached a new phase high. The AUD rose 0.1% to $0.6708, marking its highest level since October 2024. Supported by strong spending and wage data, the currency has gained 1.4% this quarter, intensifying the RBA's concerns over inflationary pressures.
Overnight Index Swaps (OIS) indicate a more than 70% probability of two RBA rate hikes next year, with the first potential increase as early as June.
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