Australian dollar hovers above $0.72 on hawkish RBA expectations
The Australian dollar hovered above $0.72 near multi-month highs as increasingly hawkish RBA signals lifted expectations for another rate hike this month. Markets price about a 69% chance of a 25-basis-point hike to 4.60% on Sept. 29.
72, near multi-month highs, as increasingly hawkish signals from the Reserve Bank lifted expectations for another rate hike this month. RBA Assistant Governor Sarah Hunter said the board has little tolerance for inflation remaining above target for an extended period and may need to raise interest rates further if price pressures prove stronger than expected. 60% at the September 29 meeting, up sharply from less than 10% a month ago, while a November move is fully priced in. The currency also gained from broad US dollar weakness and extended advances against the euro, which slipped to a near two-year low.
Domestic headwinds capped further gains, with NAB business conditions falling to a six-year low in August and consumer sentiment dropping sharply in September amid concerns about higher borrowing costs, fuel prices and the weakening housing market.