Australia dollar finds some support in RBA hawks, kiwi totters
TLT•The Australian dollar held near $0.6956 as hawkish RBA minutes offset a global risk-asset selloff, while the New Zealand dollar fell to a 17-month low of $0.5585. Markets priced a 28% chance of an RBA rate hike in November and a 60% chance of an RBNZ hike on October 28.
1. RBA minutes lift hike odds
Minutes from the Reserve Bank of Australia's last policy meeting showed the board unanimously favored a quarter-point increase to 4.60% and remained concerned that inflation would stay too high for too long. Goldman Sachs economist Andrew Boak said the minutes lowered the bar for an additional hike in November, conditional on third-quarter inflation data. Markets saw a 28% chance of a November 3 move and about a 50% chance of one in December.
2. Kiwi hits 17-month low
The Australian dollar retreated from $0.6995 overnight to around $0.6956 as the U.S. dollar strengthened broadly. The New Zealand dollar slipped 0.5% overnight to $0.5585, its lowest level since April 2025. Markets priced a 60% chance that the Reserve Bank of New Zealand would raise its cash rate by 25 basis points to 3.0% on October 28, with rates expected to reach 3.75% by August next year.
