Australia Signals It’s Done Hiking Rates, Sending Currency Lower
- Aussie dollar falls to two-week low, three-year yields slide
- Board says rate path to reach inflation target is uncertain
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Australia’s central bank signaled it’s done tightening monetary policy after leaving interest rates at a 12-year high, sparking a selloff in the currency and a rally in bonds.
The Reserve Bank held its cash rate at 4.35% for a third straight meeting on Tuesday and scrapped any reference to possible further increases. In response, the currency fell to a two-week low and the policy-sensitive three-year government bond yield dropped to 3.67%. Stocks gained.