Australia's Central Bank Holds Interest Rates Steady

SYDNEY (Reuters) – Australia's central bank held interest rates steady on Tuesday as widely expected, but softened its hawkish language by noting the board had gained "some confidence" that inflation was heading back to target.

Wrapping up its December policy meeting, the Reserve Bank of Australia (RBA) kept the cash rate at 4.35%, where it has remained all year. The statement omitted a previous line that the RBA Board was "not ruling anything in or out" as well as noting that policy needed to remain restrictive.

The dovish change in tone sent the local dollar down 0.9% as markets wagered interest rates might be cut at the next meeting in February or April.