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RBA Decision Preview: 4.85% Hike Expected and AUD/USD Outlook

Pradip FX · · 6 min read

Illustration of a classical central bank building silhouetted against a dusk sky, representing the Reserve Bank of Australia rate decision

Published 1 November 2026, before the RBA announcement. This is a preview: the decision had not been made when this was written, and market probabilities change quickly. Education only, not trading advice.

The Reserve Bank of Australia (RBA) announces its November policy decision on Tuesday 3 November at 2:30 pm Sydney time (03:30 GMT, or 09:15 in Nepal). Economists expect a fifth rate rise of 2026, lifting the cash rate target from 4.60% to 4.85%. With that move already widely priced in, the bigger question for AUD/USD traders is what the Board signals about the months that follow.

What Is Expected on 3 November

The RBA raised the cash rate by 25 basis points to 4.60% on 29 September, effective 30 September, according to the RBA’s cash rate table. It had held at 4.35% in June and August, and CommBank’s newsroom counted September as the fourth increase of the year.

Since then the inflation data has moved against the bank. The Australian Bureau of Statistics (ABS) reported that consumer prices rose 4.3% in the 12 months to September, up from 4.0% in August. Trimmed mean inflation, the underlying gauge the RBA watches most closely, was 3.6% over the year. For the September quarter the trimmed mean rose 1.0%, above the RBA’s own August forecast of 0.8%, according to a summary of bank forecasts on aussie.com.au. The RBA targets inflation of 2% to 3%.

Governor Michele Bullock told a Senate committee on 28 October that some of the risks the Board flagged in August had since materialised, and that inflation was likely to run above the August forecast, as CommBank’s summary of her remarks describes. She also said the labour market looked a little tighter than the Bank had judged earlier, despite a recent rise in unemployment.

After the CPI release, all four major Australian banks (CBA, NAB, ANZ and Westpac) forecast a 25 basis point hike to 4.85%. CBA called it an “insurance hike” against inflation staying high for longer, and some banks flag a risk of another increase as early as February, according to InvestingLive. Market pricing followed. Brown Brothers Harriman noted that rate futures lifted the probability of a November hike from 60% to 85% after the data, while Admiral Markets put it nearer 90% on 28 October.

The Key Numbers

ItemLatest figureSource
RBA cash rate target (current)4.60%RBA
Expected decision on 3 November+25 basis points to 4.85%Big four bank forecasts
September CPI, year on year4.3% (August: 4.0%)ABS
September trimmed mean, year on year3.6%ABS
September-quarter trimmed mean+1.0% (RBA August forecast: 0.8%)ABS, RBA forecast as reported
AUD/USD, Friday 30 October closeAbout 0.703Market data

Why the Statement May Matter More Than the Hike

This section is analysis rather than reporting. When a move is close to fully priced, markets often react more to the guidance around it than to the decision itself. Three things are worth watching:

  1. New forecasts. The RBA publishes a Statement on Monetary Policy alongside the decision. Bullock has already said inflation is likely to exceed the August projections, so the size of any upgrade will show how long the Board expects the fight to last.
  2. Forward guidance. The September statement left the door open to further increases if needed, as CommBank’s report on that decision noted. Whether that language is kept, strengthened or softened will be read closely.
  3. The press conference. Bullock speaks about an hour after the announcement (04:30 GMT, 10:15 in Nepal). Her comments on the labour market, energy prices and the February meeting could move the Australian dollar as much as the headline rate.

A hold would be the real surprise. ING described about 20 of the 25 basis points as priced in, so a decision to stay at 4.60% would probably hit the Australian dollar hard.

Possible Scenarios for AUD/USD

These scenarios illustrate how markets might reason. They are not forecasts, and the levels come from analyst notes that can change quickly.

ScenarioWhat the RBA doesHow markets might read it
Hawkish hikeRaises to 4.85%, lifts inflation forecasts and keeps a tightening biasSupportive for the Australian dollar. Analysts point to the 200-day moving average near 0.7056 (Brown Brothers Harriman) and ING’s 0.71 short-term target as upside reference points
Balanced hikeRaises to 4.85% but calls policy data dependent, with no clear biasA muted or sell-the-news reaction is possible. Brown Brothers Harriman highlighted 0.7000 as nearby support
Surprise holdLeaves the rate at 4.60%A sharp pullback is plausible, because markets lean heavily towards a hike

The US Dollar Side of the Pair

AUD/USD is as much a dollar story as an Australian one. The Federal Reserve held the federal funds target range at 3.75% to 4.00% on 28 October in a 10–2 vote, according to the Fed’s statement. Lisa Cook and Beth Hammack dissented in favour of a hike, InvestingLive reported. ING expects the RBA to hike but says the Fed’s stance stands between AUD/USD and 0.72 this quarter, in its note on the Australian dollar.

Friday’s US jobs report will help decide whether the Fed follows with a hike in December. We covered the central bank’s decision in Fed Holds Rates in 10-2 Vote: What It Means for the Dollar, and the jobs-report setup in our analysis of why gold is falling before NFP.

What to Watch This Week

  • Mon 2 Nov, 15:00 GMT: US ISM Manufacturing PMI.
  • Tue 3 Nov, 03:30 GMT (09:15 Nepal): RBA decision and Statement on Monetary Policy. Press conference at 04:30 GMT.
  • Tue 3 Nov: US midterm elections. See our US midterms and dollar outlook.
  • Thu 5 Nov, 12:00 GMT: Bank of England decision, where a hike to 4.00% is expected. See our BoE November preview.
  • Fri 6 Nov, 13:30 GMT (19:15 Nepal): US October jobs report.

Times are converted for the US clock change on 1 November, so New York releases now land one hour later in GMT terms than they did last week. The InvestingLive week-ahead calendar lists consensus forecasts for each event.

Trading Around the Release

The RBA announces during the Asian session, when liquidity in some pairs can be thinner and spreads wider than in London or New York hours. Our guide to forex trading sessions explains when each session is active, and Forex Spreads Explained shows why trading costs can jump around major releases.

If you trade the event, decide your risk before it starts. The Risk Management Calculator turns an account risk percentage into a position size, and our Forex Economic Calendar lists upcoming releases. Staying out of the market is also a valid decision. For more on how policy decisions move currencies, read How Central Bank Rate Decisions Move Forex.

Key Takeaways

  • The RBA is widely expected to raise the cash rate by 25 basis points to 4.85% on 3 November, its fifth hike of 2026.
  • September CPI of 4.3% and a trimmed mean quarter of 1.0%, against the RBA’s 0.8% forecast, drove the shift in expectations.
  • With the hike largely priced in, forecasts, guidance and the press conference may matter more for AUD/USD than the decision itself.
  • The Fed’s December stance and Friday’s US jobs report are the main dollar-side risks.
  • Event days bring wider spreads and faster moves, so set your position size before the release.

Official figures above link to their original sources. Bank forecasts and market probabilities are expectations rather than outcomes, and the scenario table is the author’s illustrative analysis. This article is for information only and is not investment advice. Trading leveraged products carries a high risk of loss.

Sources

Learn more: who we are · the risk disclaimer · contact us.

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

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