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Australian dollar dips after RBA holds rates, risks another hike

Rabobank expects the Reserve Bank of Australia to deliver one more rate increase in November after downgrading growth and inflation forecasts in its statement.

Reported · Written up by our desk · Major Pairs

The Australian dollar slipped briefly after the Reserve Bank of Australia left its policy rate unchanged, as traders interpreted the central bank’s statement as dovish, according to FXStreet.

FXStreet said markets responded by downgrading the RBA’s growth and inflation outlook, contributing to the AUD’s move.

However, FXStreet reported that RBA Governor Michele Bullock later said another hike is “quite possible” and that the economy remains above capacity, with policymakers debating whether to hold or raise rates.

FXStreet added that Rabobank still expects an additional rate increase in November, despite the RBA’s apparent hope that the three hikes since the start of the year would be sufficient to cool domestic demand.

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