RBA Rate Hike on Table as Aussie Wage Growth Remains Strong
AUDUSD Consolidates Recent Gains After RBA Leaves Cash Rate Unchanged
Economists Forecast Inflation Acceleration, Boosting Rate Hike Expectations
The Reserve Bank of Australia (RBA) has kept its cash rate unchanged at 0.10%, citing the need to support inflation returning to its target of 2-3%. However, the central bank acknowledged the strong wage growth figures released on Tuesday, August 13, which have kept the door open for a rate hike in November.
The AUDUSD currency pair remains in a constructive phase, consolidating its gains made after the RBA's announcement. The Australian dollar has been boosted by the strong wage growth data, which suggests that the Australian economy remains resilient and could support higher interest rates.
Economists are now forecasting that the Australian annual inflation rate will accelerate from 3.6% in May to 3.8% in the latest reading. This has increased expectations that the RBA may need to raise interest rates earlier than previously anticipated.
The US dollar has eased slightly against major currencies as markets focus on the upcoming release of key economic data, including US inflation figures on Wednesday. If the US inflation rate prints higher than expected, it could further boost the case for aggressive rate hikes by the Federal Reserve, which would likely support the US dollar.
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