Australia's central bank will hike interest rates by another half-point on Tuesday and increase borrowing costs further than previously thought in its most aggressive tightening cycle since the 1990s to arrest red hot inflation, a Reuters poll showed.

Meanwhile, a new monthly measure of Australian consumer prices on Thursday showed annual inflation eased slightly in August from July thanks to a steep drop in petrol prices, although inflation excluding volatile items accelerated. The job market has also remained tight with vacancies dipping slightly from all-time highs, adding to the case that the Reserve Bank of Australia will likely lift the official cash rate by another half point to 2.85% at its policy meeting on Tuesday.

AUD/USD has been able to accumulate a bid on a softer US dollar of late, rallying towards the high of the week near 0.6535.