FX Weekly Overview (Brazil Issue)
Dollar to reflect US economic data, Central Bank minutes, inflation in Brazil, and the Middle East
Leonel Mattos
- Currencies
RBA Signals Hawkish Tilt After Holding Cash Rate at 3.60%, Flags Sticky Inflation
RBA Signals Hawkish Tilt After Holding Cash Rate at 3.60%, Flags Sticky Inflation
David Scutt, FOREX.com APAC Market Analyst, reviews the Reserve Bank of Australia’s September decision to hold at 3.60 per cent and the hawkish tone that followed.
Key Takeaways
- RBA warns that underlying inflation decline has slowed and may persist
- Domestic demand and housing market show stronger momentum
- Markets reprice rate cut bets, pushing expectations into 2026
RBA Signals Hawkish Shift
The Reserve Bank of Australia kept the cash rate at 3.60 per cent in September but struck a more hawkish tone than markets anticipated, warning that the decline in underlying inflation has slowed and may prove persistent in some areas. It noted stronger-than-expected private demand, rising household incomes, and a strengthening housing market, while emphasising that labour conditions remain steady with unemployment unchanged at 4.2 per cent. The Bank also flagged stagflation risks with weak productivity and high unit labour costs. Markets quickly adjusted, scaling back expectations for a November rate cut and pushing pricing into 2026, with short-end yields rising and the Australian dollar finding support.
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--- Written by Frederic Guetin, StoneX TV Producer
--- Expert: David Scutt, FOREX.com APAC Market Analyst
- Currencies
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