Australian dollar gets limited support from well-flagged rate hike
FXA•The Reserve Bank of Australia unanimously raised its cash rate by 25 basis points to 4.60%, as widely expected, and said it was ready to hike further if needed. Markets imply a 44% chance of another increase in November and 60% in December.
1. RBA raises rates
The Reserve Bank of Australia lifted its cash rate by 25 basis points to 4.60%, a 15-year peak and the fourth hike this year. The decision was unanimous, and the board said it was ready to raise rates further if needed to curb persistent inflation.
2. Markets weigh next move
The Australian dollar received only fleeting support after the widely expected decision and was flat at $0.7014. Futures imply a 44% chance of another hike in November and a 60% chance in December. August consumer price data, due Wednesday, is forecast to show inflation accelerating to 4.1% from 3.5%, while core inflation is expected to remain at 3.6%, above the RBA's 2% to 3% target range.
