Australian Dollar Hits Three-Year High

The Australian dollar has surged to a three-year high as investors price in renewed Reserve Bank of Australia tightening and ride a strengthening Chinese yuan, a powerful combination for the Asia-linked currency.

AUD/USD climbed to 0.7128, its highest level in three years, while GBP/AUD fell to 1.9170, the lowest level in 18 months.

Momentum behind the rally reflects growing conviction that the Reserve Bank of Australia is pivoting back toward rate hikes.