Rabobank expects a rate rise from the RBA but warns the AUD could struggle as Governor Bullock flags economic headwinds.

Rabobank’s research team predicts the Reserve Bank of Australia will lift its cash rate at the upcoming policy meeting, buoyed by stronger‑than‑expected inflation and hawkish comments from rate setters. Despite the consensus among forecasters for a hike, the Australian dollar remains the third‑worst performer among G10 currencies over the past five days.

Why a hike is likely

• Recent Australian CPI came in above expectations, reinforcing the case for tighter policy.
• RBA officials have been increasingly vocal about the need for further restraint.
• A Bloomberg poll shows all but three analysts expect a rate increase this week.

Risks to the Aussie rally

• Governor Michele Bullock may emphasise real‑economy weakness, dampening sentiment.
• Higher oil prices after the U.S. mid‑term elections could curb further RBA tightening.
• The U.S. Federal Reserve is seen pushing rates higher in December, limiting upside for AUD/USD.

What traders are watching

• AUD/USD around 0.71 on a three‑month horizon, with 0.72 as the revised 9‑ and 12‑month target.
• U.S. CPI and Fed minutes for clues on December rate moves.
• RBA’s official statement and any comments on household demand pressures.

Related news

• Evening market overview, 2 November 2026
• Australian dollar dips further amid mixed data with RBA decision in focus
• DXY slides to 101.75 as Iran talks lift safe‑haven demand
• Usd edges lower as risk sentiment improves ahead of us midterm elections

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