Australian Dollar Holds Firm on RBA Hike Expectations
The Australian dollar held its ground near an 11-week high on Tuesday as the Reserve Bank of Australia hinted at potential interest rate hikes.
According to the RBA's August board meeting minutes, several members felt that tightening was needed due to upside risks to inflation. However, they compromised on a steady call pending more data, implying that rates might be lifted again by their next meeting on September 28 and 29.
The Aussie dollar nudged up 0.1% to $0.7155, helped by the slight increase in 10-year yields. Major resistance remains at $0.7200 and $0.7277, with support around $0.7067.
Economist Imre Speizer from Westpac expects further gains for the kiwi dollar as the Reserve Bank of New Zealand continues to hike rates, but notes that the Federal Reserve's September meeting implies only a 45% chance of a hike.