AUD Slips After RBA Hike; NZD/USD Breaks Below Key Level

The Australian Dollar slipped after the Reserve Bank of Australia (RBA) raised its cash rate to 4.60%, its highest since 2011, in a move that signaled less future tightening.

The RBA's decision led to a decline in the AUD and weighed on regional sentiment, particularly for the New Zealand Dollar (NZD), which broke below 0.5650 for the first time during this slide.

Markets are now eyeing the Reserve Bank of New Zealand's (RBNZ) next move, with odds of a rate hike in October rebounding to about 80% after initially falling to around 36%. The RBNZ is expected to raise its Official Cash Rate to 3.00%, which would put it at the bottom of its neutral range.

China's cooling economy and Brent crude oil prices fluctuating near $80 a barrel are also contributing to near-term inflation risks, making it unlikely for the Kiwi to find sustained support.