RBA to hike interest rates

The Reserve Bank of Australia (RBA) has maintained its cash rate at 4.35%, signaling a dovish shift amid concerns of a softer economic outlook. RBA Governor Bullock noted that there were no discussions of rate hikes during the recent meeting, suggesting a cautious approach as underlying inflation remains above target at 3.9%. This has led to a decline in the Australian Dollar against major currencies, with the AUD/USD dipping to $0.6828. Meanwhile, Bank of Japan Governor Kazuo Ueda has also expressed a cautious stance, indicating that the Bank can afford to delay any interest rate increases until uncertainties in the economic landscape are resolved. Overall, both central banks are navigating complex economic conditions, with inflation persisting above desirable levels and consumer spending showing signs of resilience despite challenges. Analysts predict that significant rate cuts in Australia may not occur until at least 2025.