DBS research says the AUD reflects expectations of a 25‑bp RBA rate increase, yet a pause or near‑peak signal could still surprise markets.

DBS Group Research analyst Philip Wee notes that the Australian dollar has already baked in expectations of a 25 basis‑point rise in the Reserve Bank of Australia’s cash rate to 4.85% at the November 3 meeting. The pricing follows a recent acceleration in consumer‑price inflation, which has revived concerns that the RBA may need to tighten further despite three earlier hikes that have begun to cool the labour market.

Policy trade‑off under pressure

Wee warns that the central bank could still disappoint by either pausing like the Reserve Bank of New Zealand did, or by delivering a hike while signalling that rates are close to their peak. The RBA’s upcoming Statement on Monetary Policy is expected to show lower 2027 GDP growth forecasts and higher inflation projections, highlighting a difficult balance between supporting growth and containing price pressures.

AUD/USD outlook

The Aussie‑dollar pair has recovered from 0.6894 to 0.7032 in the latter half of October, but the rally remains tentative. The U.S. dollar’s ability to break its recent high of 0.7068 will also influence the pair’s next move. Traders are watching for any tone in the RBA’s statement that could shift market sentiment.

What traders are watching next

• Whether the RBA signals a pause or a near‑peak stance in its November decision
• "Key 2027 GDP and inflation forecasts in the RBA’s Statement on Monetary Policy
• "AUD/USD support around 0.6950 and resistance near 0.7100

Related news

• Australian dollar slips ahead of RBA rate rise and US midterms
• 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.