AUD Gains as RBA Hikes Interest Rates for Fourth Time This Year
The Australian Dollar (AUD) has strengthened against several major currencies after the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points to 4.6%. This is the fourth quarter-point increase this year, and it's expected that further tightening may be needed due to elevated supply shocks and demand driven by the AI boom.
RBA Governor Michele Bullock stated last week that inflation risks are materializing from the Middle East and excess demand at home.
Analysts at ING believe that Governor Bullock will continue with further tightening, citing that 'inflation concerns remain elevated' and 'core CPI measures have all remained hot'. This reinforces their view that the RBA will keep the door open to more rate hikes, supporting the Aussie Dollar.