The Australian dollar steadied around $0.664 on Tuesday, following three consecutive sessions of losses, as market sentiment improved on growing expectations of an earlier-than-anticipated rate hike. Commonwealth Bank of Australia and National Australia Bank now see the Reserve Bank beginning to tighten policy as soon as February, citing stubborn inflation in a capacity-constrained economy. The shift follows the RBA’s decision to leave the cash rate unchanged at its December policy meeting, while striking a notably hawkish tone. Swaps now price a 28% chance of a February hike, about 41% for March, with August almost fully priced in. On the economic front, the Westpac–Melbourne Institute Consumer Sentiment Index fell 9% month-on-month in December, with inflation emerging as the primary concern. Moreover, flash data showed the Composite PMI slowed to a seven-month low, as services activity weakened while manufacturing activity accelerated.