Australian dollar holds above $0.705 as RBA stays restrictive
The Australian dollar remains above $0.705 near multi-week highs after RBA remarks emphasized restrictive policy and slower housing credit growth, while the RBA keeps the cash rate at 4.35%.
The Australian dollar held above $0.705, staying near multi-week highs as the Reserve Bank’s latest remarks reinforced a restrictive policy stance.
RBA Assistant Governor Christopher Kent said earlier rate increases were working as intended, with tighter monetary conditions weighing on consumer spending and slowing broader economic activity.
He noted that housing credit growth had slowed, with a noticeable decline in new home lending, and said financial conditions overall remained somewhat restrictive.
The central bank kept its cash rate at 4.35% this week after raising it by 75 basis points since February.
However, Governor Michele Bullock said policymakers remained concerned that inflation may not cool as hoped and were prepared to raise rates again if needed.
Markets priced a roughly 75% chance of a hike to 4.60% by December, likely marking the end of the tightening cycle.
Attention now turns to Governor Michele Bullock, who is due to testify before parliament on Friday.