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RBA Raises Cash Rate to 4.85% in a 6-3 Split: What It Means for AUD/USD

Pradip FX · · 6 min read

Abstract illustration of five rising steps beside nine vote markers, six filled and three hollow, representing the Reserve Bank of Australia 6-3 split vote on its November 2026 rate hike

Published 4 November 2026. This article reports on a decision announced on 3 November 2026 and uses information available at the time of writing. Market prices move quickly. Education only, not trading advice.

The Reserve Bank of Australia (RBA) raised its cash rate target by 25 basis points to 4.85% on Tuesday 3 November 2026, yet the Australian dollar still ended the session lower. The explanation sits in the vote. Six members of the Monetary Policy Board backed the increase, while three preferred to leave the rate at 4.60%, according to the RBA’s official statement. Traders read that split, together with a statement that stressed data dependence rather than promising more increases, as less hawkish than the headline rate rise suggests. It is the fifth increase of 2026 and takes the cash rate to its highest level since 2008, according to Australian media reports.

What the RBA Decided

ItemDetail
Decision dateTuesday 3 November 2026, 2:30 pm AEDT (03:30 GMT)
New cash rate target4.85%, up 25 basis points
Previous rate4.60%
Board vote6 members for a hike, 3 for no change
Rate rises in 2026Fifth, according to Australian media reports
Next decisionTuesday 8 December 2026, 2:30 pm AEDT

The RBA said inflation remains elevated and broadly based, and that its updated staff forecasts revised the outlook materially higher. It now expects inflation to stay above 3% over the coming year and not to reach the top of its 2% to 3% target range until late 2027, about three quarters later than it previously forecast.

The Board also acknowledged the cost of tighter policy. It said the economy is slowing, housing prices have fallen significantly and the unemployment rate has risen. Local reporting of the Statement on Monetary Policy put September housing prices almost 5% below their March peak, with unemployment averaging 4.6% in the September quarter, according to SHARETRADER.

Why the RBA Hiked Despite a Slowing Economy

  • Energy and commodity prices. The RBA tied part of its inflation upgrade to higher fuel and commodity prices affected by the conflict in the Middle East, and said fuel costs are being passed through to other prices.
  • Tighter domestic capacity. The Board judged that capacity pressures are a little tighter than it thought earlier.
  • AI-related investment. It said AI-related investment is driving rapid price growth for technology-related goods.
  • Broad price pressure. Consumer prices rose 4.3% in the 12 months to September, according to the RBA’s inflation summary.
  • Inflation expectations. The Board warned of an increasing risk that higher inflation expectations become embedded.

How AUD/USD Reacted

The Australian dollar traded at roughly 69.7 to 69.8 US cents in the hours after the decision, depending on the source, a fall of about 0.3% in most reports. The RBA’s own exchange-rate table showed AUD/USD at 0.6976 at 4:00 pm Sydney time. Business Recorder, citing Reuters, reported that the Australian dollar and China’s yuan both weakened after policy moves by their central banks.

A rate rise normally supports a currency, so why did the Aussie slip? Market commentary points to three factors:

  • The hike was largely priced in. Media reports said markets had assigned roughly an 89% chance to an increase before the meeting, so the rate move itself carried little surprise.
  • The vote was divided. Three dissents suggest the bar for further increases may be higher. Trading and Investment News, citing ABC News, said traders viewed the outcome as more dovish than expected, and the three-year Australian bond yield reportedly fell to about 4.77%.
  • Wider market moves. Newsquawk, cited in the same report, described the Australian dollar as the clear underperformer among major currencies that day, with losses in copper and gold adding pressure.

These are explanations drawn from market commentary, not confirmed causes. Currencies often move for several reasons at once.

The Global Rate Backdrop

The RBA move leaves Australia’s cash rate well above the US policy range. The Federal Reserve held at 3.75% to 4.00% on 28 October, with two officials voting for a quarter-point hike, as we covered in Fed Holds Rates in 10-2 Vote. Pricing for a December Fed hike was about 74% on the CME FedWatch Tool on 2 November according to FXStreet, and 77% on 4 November according to Charles Schwab. The US dollar index traded between roughly 101.4 and 101.9 from 2 to 4 November, based on Trading Economics data.

If US rate expectations rise, the interest-rate gap that supports AUD/USD can narrow, which is why Friday’s US payrolls matter for the Aussie too. See our October jobs report preview. For the Australia versus New Zealand angle, read RBNZ Surprise Hold vs RBA Hike Bets.

What Traders Should Watch Next

Date and timeEventWhy it matters
Fri 6 Nov, 13:30 GMT (19:15 Nepal)US October jobs reportShapes Fed hike pricing, the US side of AUD/USD
Tue 17 Nov, 11:30 am AEDT (06:15 Nepal)RBA minutes for the November meetingMay show how the three dissenters argued their case
Wed 25 NovAustralia October monthly CPINext test of the RBA’s inflation forecasts
Tue 8 Dec, 2:30 pm AEDT (09:15 Nepal)Next RBA decisionWhether the Board pauses or tightens again

Dates come from the RBA website. Release times can change, so confirm them on the HamroForex economic calendar.

Our Analysis: A Hike That Leaves the Next Step Open

This section is HamroForex analysis, not reporting. The RBA has now raised rates by 125 basis points this year, according to media tallies, while telling markets only that it will follow the data. A 6-3 vote suggests a sizeable minority already sees enough tightening, yet the Board’s own forecasts show inflation staying elevated through much of 2027. That tension makes the 17 November minutes and the 25 November CPI more important than usual.

If inflation prints hotter than forecast, the dissenters’ case weakens. If activity and housing data keep softening, the case for a pause on 8 December strengthens. Neither outcome is certain, and AUD/USD will also respond to US data, oil and risk sentiment.

Rate decisions and data releases bring wider spreads and fast price swings. Size positions with the Risk Management Calculator, and read How Central Bank Rate Decisions Move Forex for the basics. Our earlier RBA decision preview sets out the scenarios traders were weighing before the announcement.

Key Takeaways

  • The RBA raised its cash rate by 25 basis points to 4.85% on 3 November 2026 in a 6-3 vote.
  • The Board expects inflation to stay elevated through much of 2027 and to reach the top of its target range only in late 2027.
  • AUD/USD slipped after the decision, which analysts linked to the split vote and a hike that was already priced in.
  • The 17 November minutes, 25 November CPI and 8 December meeting are the next RBA checkpoints.
  • US jobs data on 6 November can move AUD/USD through the dollar leg.

This article is for education only and is not investment advice. Trading leveraged products carries a high risk of loss, and you can lose more than you expect. Rules on forex trading differ between countries, so read Is Forex Trading Legal in Nepal? before you trade.

Sources

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Educational content, not financial advice. Leveraged trading can lose more than your deposit.

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