The U.S. dollar was gaining this morning on a stronger-than-expected GDP report, rising expectations of a Fed rate hike, and easing concerns about global growth. Second quarter GDP was up 3.9%, well ahead of consensus expectations of 3.7%.
In the case of GBP/AUD, it’s hard to argue against the recent bullish surge; to wit, the pair is up nearly 5,000 pips from where it was trading this time last year, and rates have tacked on 2,700 pips in just over the last four months alone. With the prolonged uptrend seemingly growing a bit long in the tooth, it’s certainly worth pondering whether we may be at an inflection point.
The U.S. dollar approached two-week highs on Tuesday morning after Atlanta Federal Reserve Bank President Dennis Lockhart said he predicts the U.S. central bank will raise interest rates at the October or December FOMC meeting.