Aussie Dollar Sinks on RBA Hints at Further Rate Tightening

The Australian dollar slipped below $0.698 as investors reassessed the monetary policy outlook following comments from Reserve Bank of Australia Governor Michele Bullock.

Bullock stated that another interest rate hike may still be needed to bring inflation back to target, but noted that the near-term outlook remains highly uncertain.

The RBA's governor emphasized that further moderation in domestic demand and labor market conditions would likely be necessary before policymakers can determine if previous tightening has been sufficient.

This led markets to trim the probability of an August rate hike to around 20% from about 30%, although investors still expect the cash rate to reach 4.60% by year-end.