AUD Slips on Dovish RBA Statement, But Hike Still Possible

The Australian Dollar (AUD) saw a brief dip after the Reserve Bank of Australia's (RBA) decision to keep its policy rate unchanged. The central bank had maintained expectations by not raising interest rates, but traders interpreted some dovish language in the statement as a sign that policymakers might be hesitant to raise rates further.

RBA Governor Bullock later clarified her stance in a press conference, saying that policymakers had debated whether to hold or hike rates and that another increase is 'quite possible'.

This contradicts Rabobank's Australia strategist's forecast of one more rate increase in November. The strategist had noted prior to the meeting that the RBA seems to hope that previous rate hikes would be sufficient to dampen domestic demand, but was not entirely convinced.