AUD/USD Holds Steady as Aussie Banks Unite Behind Rate Hike Expectations
Australia's Big Four banks have all agreed on a September rate hike, expecting the Reserve Bank of Australia to lift the cash rate by 25 basis points to 4.60%.
This was reflected in recent bank forecasts, with CBA, NAB, Westpac, and ANZ all calling for a 25-basis-point increase in September.
The decision comes after RBA Governor Michele Bullock's testimony last week, which accelerated the shift in market expectations. Bullock stated that some upside inflation risks identified earlier were materializing, citing renewed oil pressures and global AI-related demand.
Despite the rate hike being priced in heavily by markets, AUD/USD has not extended its earlier rally, trading around $0.712 on Tuesday. This is because currency markets have already absorbed most of the information from the bank forecasts, with market pricing alone influencing the RBA's decision.