Institution: The Australian dollar may strengthen, boosted by the prospect of further interest rate hikes by the Reserve Bank of Australia.

Richard Franulovich of Westpac Bank in the Western Pacific commented that following the earlier rate hike by the Reserve Bank of Australia today, expectations of further rate hikes by the central bank may drive the Australian dollar higher against other currencies. The foreign exchange strategist stated, "The market has not fully priced in the rate hike expectations, and the 'responsibly' biased towards tightening statement." He added, "Interest rate markets are pricing in more rate hike risks, which clearly provides more upside momentum for the Australian dollar." Franulovich also mentioned that the Australian dollar against the New Zealand dollar has "room to retest the highs in the 1.16 range."