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Australian dollar edges up as RBA minutes keep a hike option open

AUD/USD was last around 0.7146, and markets are pricing only a slim chance of an immediate RBA move after the July minutes.

Reported · Written up by our desk · Major Pairs

The Australian dollar rose slightly versus major currency peers in Tuesday trading, though it was lower against the US dollar, with AUD/USD around 0.7146 in the European session, according to FXStreet.

FXStreet cited RBA minutes from the July policy meeting showing that several board members viewed an interest rate hike as “quite possible” if upside inflation risks begin to materialize. The minutes also showed officials discussed either raising the Official Cash Rate by 25 basis points or holding it at 4.35%.

Despite the more hawkish tone in the minutes, FXStreet said market participants do not expect the RBA to raise rates immediately. Markets were pricing a slim 13% chance of a move to 4.6% at the September 28 to 29 meeting, and about 67% priced in for a move by February next year.

Going forward, the next key driver for the Australian dollar will be Wednesday’s July Consumer Price Index release, FXStreet added. The outlet also pointed to commentary that underlying inflation remains sticky, with pressure reflected in the July NAB business survey.

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