Reserve Bank of Australia minutes reveal board members see a 25 basis point hike as possible if inflation risks materialize.
The Australian Dollar (AUD) strengthened against most major currencies, except the US Dollar (USD), after the Reserve Bank of Australia (RBA) signaled potential rate hikes. The AUD/USD pair traded near 0.7147, slightly lower in the European session, while the currency gained ground against the Japanese Yen.
RBA minutes from the July meeting showed officials debated raising the Official Cash Rate by 25 basis points or holding it at 4.35%. Several board members viewed upside inflation risks as “quite possible,” though markets do not expect an immediate hike.
Despite the hawkish tone, the AUD’s gains remained limited, reflecting cautious market sentiment. The RBA’s stance contrasts with broader expectations of global monetary easing.