Aussie Rallying on Hawkish RBA Minutes

Aussie on the Up The Australian Dollar is turning higher today on the back of a hawkish set of RBA minutes. The minutes, released overnight, showed that the RBA considered hiking rates again this month but ultimately decided to allow more time to assess the impact of recent tightening on the economy. This marks the third consecutive meeting at which the bank has left rates unchanged.Rate Hike Risks RemainGiven the downside risks to the economy, which the bank warned about at this month’s meeting, traders had adjusted their tightening expectations lower. However, with the minutes showing that a further hike was much closer to being delivered than initially thought, the market is now adjusting its rate projections for the remainder of the year.Inflation Still KeyLooking ahead, the bank confirmed this view, noting that “Some further tightening in policy may be required should inflation prove more persistent than expected”. With the RBA now back on traders’ radar, AUD looks poised for further upside near-term, particularly if we see any stickiness in inflation readings coming this month.Technical ViewsAUDUSDPrice action continues to hold in a block of consolidation below the .6520 level for now. On the back of the heavy sell off over July and August, the focus remains on a further push lower towards the .6275 level next. We are seeing some bullish divergence on momentum studies, however, though only a topside break of .6520 will register any interest.