AUD/USD hovers near one‑week lows as traders trim risk before the RBA’s expected 25 bps hike and await US mid‑term election data.

The Aussie dollar is on the back foot, with AUD/USD trading around 0.7010 on Monday – a one‑week low and down 0.33% on the day. The move comes as market participants scale back exposure ahead of the Reserve Bank of Australia’s (RBA) policy decision scheduled for Tuesday, even though the US dollar has softened.

RBA outlook and inflation pressure

The RBA is widely expected to lift its cash rate by 25 basis points to 4.85%, the highest level since 2008 and the fifth increase this year. Inflation remains above the bank’s 2‑3% target range, with headline CPI rising to 4.3% year‑on‑year in September and trimmed‑mean inflation climbing to 3.6%.

Rabobank FX strategists warned that any commentary from Governor Michele Bullock on inflation risks could reinforce expectations of further tightening, while a focus on economic headwinds might ease them. They also noted that oil‑price dynamics after the US mid‑term elections could influence the RBA’s path.

Broader market backdrop

China’s manufacturing PMI slipped to 52.0 in October, still above the 51.6 forecast, while factory output hit a six‑month high. However, export‑order growth slowed and business confidence fell to a nine‑month low, underscoring mixed conditions in Australia’s key trading partner.

Oil prices dropped more than 4% after diplomatic signals from the Middle East, and the US dollar index (DXY) hovered near 101.65, its lowest in a week, as lower Treasury yields and a tech‑sector sell‑off lifted demand for safe‑haven bonds.

What traders are watching next

• US ISM Manufacturing PMI later Monday
• JOLTS job openings on Tuesday
• ADP employment and ISM Services PMI on Wednesday
• Friday’s Non‑farm Payrolls for the final Fed clue

Related news

• Australian dollar largely priced for RBA hike, but disappointment risk remains
• Australian dollar may not sustain gains after RBA hike, says Rabobank
• Evening market overview, 2 November 2026
• Australian dollar dips further amid mixed data with RBA decision in focus

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This article is compiled from international market news for information only. It is not investment advice.