Forex

Australian Dollar Sits Near 70 U.S. Cents as the RBA Is Expected to Lift Its Cash Rate to 4.85% on Tuesday

The Australian dollar ended October near $0.703 as economists and markets expect the Reserve Bank of Australia to raise its cash rate to 4.85% on Nov. 3, opening a week of key rate decisions.

Nov 01, 2026 - 12:17

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The Australian dollar enters the week near 70 U.S. cents as markets prepare for a Reserve Bank of Australia (RBA) decision on Tuesday, November 3, 2026, at which most economists expect another increase in interest rates. The RBA's cash rate target stands at 4.60%, effective since September 30, and the next update is due at 2:30 p.m. Sydney time on November 3, according to the RBA's website. That is 10:30 p.m. Monday, November 2, in New York.

Thirty of 32 economists in a Reuters poll expect the central bank to raise the cash rate by a quarter point to 4.85%, according to a FinancialJuice summary of the poll. Markets were pricing roughly 88% odds of that outcome, Yardeni Research said, which would make it a second straight increase.

Where the currency stands

The Australian dollar finished Friday, October 30, at about $0.7027, according to Yahoo Finance data, up about 1.2% from $0.6946 at the end of September. The RBA's own 4:00 p.m. Sydney reading on October 30 put the currency at $0.7040 and its trade-weighted index at 65.2.

The currency rose 0.3% to $0.7043 on the day last week's third-quarter inflation data were released, as traders added to bets on a rate increase, Business Recorder reported, citing Reuters. Market-implied odds of a November hike climbed to 85% from 69% after the data, the report said.

The inflation case

Australia's consumer price index rose 1.3% in the third quarter, after 0.6% in the second quarter, and annual inflation ran at 3.9%, according to Australian Bureau of Statistics figures cited by Business Recorder. The trimmed mean, the RBA's preferred gauge of underlying inflation, rose 1.0% in the quarter, above the bank's 2% to 3% target band on an annual basis. A November move would be the RBA's fifth rate increase of 2026, the report said.

Commonwealth Bank of Australia economists changed their forecast to a November hike, citing recent central bank communication. RBA Governor Michele Bullock told a Senate committee that "inflation will therefore likely be higher than was our base case in August," pointing to higher global energy prices after a re-escalation of the conflict in the Middle East, according to CommBank's research note.

"As a result, we see the hike in November as an insurance hike to protect against these forces," said Belinda Allen, CommBank's head of Australian economics. The bank also said it expects weaker growth, softer home prices and higher unemployment as rates take effect. Market pricing for a November increase stood at about 90%, according to CommBank.

The outcome is not guaranteed. Last week the Reserve Bank of New Zealand held its official cash rate at 2.75% even though markets had priced 95% odds of a hike, Yardeni Research noted.

Other decisions and data this week

The Bank of England announces its decision on Thursday, November 5. Markets have priced 98% odds of a quarter-point increase to 4.00% and a 35% chance of another hike in December, according to Yardeni Research. Euro-area flash inflation for October is due Wednesday after a 3.8% annual rate in September, with the core rate seen holding at 2.5%.

In the United States, the Federal Reserve held its benchmark range at 3.75% to 4.00% on October 28 in a 10-2 vote, with both dissenters favoring a hike. The October jobs report is due Friday, November 6. The ICE U.S. Dollar Index closed Friday at 101.88, up from 101.45 at the end of September, while the euro ended at about $1.1183 and the dollar at about 157.80 yen, Yahoo Finance data show.