RBA Holds Steady on Rates as Markets Anticipate Further Hikes

The Reserve Bank of Australia (RBA) kept interest rates steady at 4.35% in its August board meeting, leaving markets uncertain about future hikes.

The decision was expected by investors, who now see an 18% chance of a hike at the next meeting in September and around a 40% chance in November.

Wee Khoon Chong, APAC macro strategist at BNY Mellon, noted that the RBA retained a hawkish bias and emphasized falling house prices and weaker housing credit as factors that could raise the bar for further tightening.

The Australian dollar barely budged on the news, trading at $0.7050 and supported by its relatively attractive yield within G10.