Australian dollar extends rally, market narrows odds on hike

Business Recorder reported on Wednesday that the Australian dollar was poised to extend its gains for a fourth session, supported by softer US yields. It rose 0.1% to $0.7011 after climbing 0.3% overnight, while Reserve Bank of Australia Deputy Governor Andrew Hauser said inflation remained a concern despite tighter policy. The currency market raised the implied chance of a November rate increase to 44%, from 30% at the start of the week.

The RBA will consider rates on November 3, with third-quarter Australian consumer price data due next week. Analysts cited in the report expect core inflation to increase 0.9% to 1.0%, potentially leaving the annual rate at 3.5%, above the RBA’s 2% to 3% target band. In New Zealand, markets see almost a 90% chance of a quarter-point increase in the official cash rate to 3.0% next week, while forecasts put third-quarter inflation at 0.8%.