The Australian Dollar (AUD) fell sharply on Tuesday, sliding to near 0.6500 against the US Dollar (USD) following the Reserve Bank of Australia’s (RBA) monetary policy decision. The AUD/USD pair touched a 10-day low, down almost 0.6% from Monday’s close, as the RBA maintained its Official Cash Rate (OCR) at 3.6%, in line with market expectations.
The RBA opted to keep rates unchanged for the second consecutive meeting, citing persistent inflationary pressures. Data from the Australian Bureau of Statistics showed the Consumer Price Index (CPI) rose 1.3% in Q3, exceeding estimates of 1.1% and the prior 0.7% reading.
RBA Governor Michele Bullock commented that annual core inflation above 3% is “not ideal,” emphasizing the need for “a little bit of tightness” in the economy to bring inflation back down. She refrained from providing guidance on the timing or scale of potential future rate changes, noting ongoing uncertainty regarding inflation.
US Dollar Strength Adds Pressure
The US Dollar (USD) continues to trade firmly, supported by waning expectations for additional Federal Reserve rate cuts this year. The US Dollar Index (DXY) reached a three-month high near 100.00, while the probability of a 25-basis-point Fed cut in December has fallen to 67.3% from 94.4% last week, according to the CME FedWatch tool.
Market Outlook
Looking ahead, the Australian Dollar will be sensitive to the upcoming Trade Balance data for September, scheduled for release on Thursday.
Economic Indicator: RBA Interest Rate Decision
The RBA’s interest rate decisions, announced at the conclusion of its eight annual meetings, are closely watched by markets. A hawkish stance, such as a rate hike, typically supports the AUD, whereas a dovish tone or unchanged rates is usually bearish for the currency.
Latest Data:
- Actual OCR: 3.6%
- Consensus: 3.6%
- Previous: 3.6%
- Release: Tue, Nov 4, 2025