RBA's Hawkish Stance Sends Aussie Dollar Tumbling

The Australian dollar dipped on Tuesday after Reserve Bank of Australia Governor Michele Bullock hinted at another interest-rate hike to restrain inflation, but emphasized uncertainty in the near-term outlook.

Bullock said that further moderation in domestic demand and labour market conditions would be necessary to curb inflation, adding that it was not yet clear whether the three rate hikes already delivered would be sufficient.

The comments led investors to trim expectations of an August rate increase, with markets pricing about a 20% chance of a move from the current 4.35% cash rate, down from around 30% previously.