Australian Dollar Holds Firm as RBA Minutes Hint at Rate Hikes

The Australian dollar held steady near an 11-week high on Tuesday after the Reserve Bank of Australia's minutes from its August board meeting suggested that policymakers are closer to raising interest rates than previously thought.

The RBA minutes revealed that several members of the nine-person board believed a rate hike was necessary due to upside risks to inflation, but they compromised on keeping rates steady pending more data.

Markets, however, only assign a 14% chance of a quarter-point rise in the cash rate, though this increases to 68% by December. Central bank officials have repeatedly warned that inflation risks lie to the upside and rates might be lifted again if inflation does not recede as hoped.