Australian dollar gets limited support from well-flagged rate hike

Business Recorder reported that the Australian dollar received only brief support on Tuesday after the Reserve Bank of Australia lifted its cash rate by a quarter point to 4.60%, the fourth increase this year and a 15-year high. The unanimous decision was fully anticipated by markets, which limited the currency's reaction. The Aussie held roughly unchanged, at $0.7014.

Policymakers indicated they could tighten further if needed to tame persistent inflation. Consumer price data for August, due Wednesday, is forecast to show a climb to 4.1% from 3.5%, partly driven by higher fuel costs. Core inflation is expected to stay at 3.6%, well above the central bank's 2% to 3% target range. Futures pricing points to a 44% likelihood of a further increase at the November meeting.

The kiwi dollar slipped slightly to $0.5656, while markets assign a 78% chance that the Reserve Bank of New Zealand lifts its rate to 3.0% on October 28. Separately, the New Zealand government showed a narrower budget gap and cut its 2026/27 debt issuance plan to NZ$30 billion, a reduction of NZ$4 billion. The multi-year borrowing plan to 2030 shrank by NZ$15 billion.