RBA Holds Steady as Markets Reassess Rate Hike Bets

The Reserve Bank of Australia (RBA) is expected to maintain its Official Cash Rate at 4.35% for the second consecutive meeting on Tuesday, August 15.

Market expectations have shifted dramatically following a softer-than-expected inflation report, reducing the urgency for another rate hike. The RBA's preferred Trimmed Mean CPI rose 0.8% quarter-on-quarter (QoQ) in Q2, below market expectations of a 0.9% increase.

The Australian Dollar is set to experience volatility around the RBA policy announcement and Governor Michele Bullock's press conference at 05:30 GMT. Markets are focused on signals about the central bank's next policy move, with softer inflation data potentially clouding their outlook on interest rates.