While commenting on the Reserve Bank of Australia's (RBA) policy outlook at a post-policy meeting dinner in Perth, RBA Governor Philip Lowe repeated that some further tightening may be required to bring inflation back to 2-3% target within a reasonable timeframe.

Additional takeaways

"We will do what is necessary to bring inflation back to target."

"Board is not on pre-set course, paying attention to consumption, inflation, jobs, global economy."

"We don’t need to get inflation back to target straight away, but can't take too long."

"We are taking a bit more time than some other countries, but there is a limit."

"Since April pause in hikes, house prices and A$ had responded to the changing rate outlook."

"Labour market is still tight, services inflation proving stubborn."

"Experience abroad points to upside risk for services inflation."

"Board is aware higher rates, inflation are squeezing people's budgets."

"Board discussed RBA review recommendations, broadly speaking they make sense."

Market reaction

AUD/USD clings to strong daily gains that it registered following the RBA's unexpected 25 basis points rate hike. As of writing, the pair was trading at around 0.6700, where it was up 1% on a daily basis.