RBA Hikes Rates to New High, Triggers Limited Aussie Dollar Reaction

The Reserve Bank of Australia (RBA) hiked interest rates to a 15-year peak, sparking only limited support for the Australian dollar. The RBA raised its cash rate by 25 basis points to 4.60%, its fourth hike this year.

Markets had fully priced in the move, which means traders were already expecting it and didn't react much. However, futures imply a 44% chance of another rate hike in November, with December odds at 60%.

Consumer price data for August is due on Wednesday, and forecast to show an acceleration to 4.1% from 3.5%, driven by higher fuel costs. Core inflation is seen staying at 3.6%, above the RBA's target range of 2% to 3%.