Australian Dollar Fails to Hold Gains Despite Hawkish Rate Talk
The Australian dollar experienced a brief rally on Wednesday due to speculation about interest rate hikes by the Reserve Bank of Australia (RBA), but ultimately fell back as major stock markets declined.
The Aussie dipped 0.1% to $0.7075, having already eased 0.2% overnight and away from its 10-week peak of $0.7129.
RBA Deputy Governor Andrew Hauser warned that inflation risks remain on the upside, and interest rates might need to be hiked further, echoing RBA Governor Michele Bullock's view that a rate rise could still be necessary after holding rates at 4.35% last week.
Markets imply only a 16% chance of a rate hike at the RBA's next meeting on September 29, with a November move seen around 40%, and a probability of one final lift to 4.60% early next year up around 70%.