Australian dollar holds above $0.71 after RBA August minutes
The Australian dollar stays above $0.71 near an eleven-week high as markets digest RBA August meeting minutes showing cash-rate guidance remains restrictive but inflation persistence risks flagged.
The Australian dollar held above $0.71, trading near an eleven-week high as markets weighed the RBA’s August meeting minutes.
While the Board judged the current cash rate was sufficiently restrictive to bring inflation back to target within a reasonable timeframe, several members saw a meaningful risk that inflation could prove more persistent than expected.
The RBA held rates at 4.35% for a second straight meeting two weeks ago after three hikes earlier this year, but policymakers warned of further tightening if inflation risks materialize.
Still, weak jobs data has reduced expectations for an immediate hike, with markets pricing only a 13% chance of a September increase, while seeing around a 67% probability of a hike by February 2027.
Upcoming monthly inflation data on Wednesday will therefore be crucial for the policy outlook.
Headline inflation is expected to ease to 3.2% from 3.8% despite a 0.8% monthly rise, while the trimmed mean is forecast to edge down to 3.5% from 3.6%.