RBA Holds Rates Steady Amid Hawkish Inflation Warning

The Reserve Bank of Australia (RBA) kept interest rates steady at 4.35%, but Governor Michele Bullock delivered a hawkish message, emphasizing upside inflation risks and revealing that a rate hike was discussed.

Despite the unchanged policy setting, short-dated Australian yields reversed higher, indicating market expectations for future monetary tightening.

ING's FX team does not expect further RBA hikes this year but still projects AUD/USD rising towards 0.73 by year-end.