4.85%: RBA expected to lift interest rate

• 4.85% is the interest rate expected from the Reserve Bank of Australia in November.
• Upside inflation risks have materialised, according to RBA Governor Michele Bullock.
• Despite improved market sentiment, the Australian Dollar remains weak before the decision.

4.85% is the widely expected new Official Cash Rate (OCR). The Reserve Bank of Australia (RBA) announces its monetary policy decision on Tuesday, with a 25 basis points (bps) increase from 4.6% anticipated. An increase in line with expectations would mark the fifth interest rate rise of 2026 and take the OCR to an 18-year high.

At 03:30 GMT, the rate decision and Monetary Policy Statement will be released. RBA Governor Michele Bullock will then hold a press conference at 04:30 GMT.

The Australian Dollar (AUD) is struggling to hold 0.7000 against the US Dollar (USD) as the announcement approaches.

Inflation remains the priority

Persistent price pressures have driven interest rate increases in 2026, including in Australia. The RBA first raised the OCR in February, before the Middle East war affected global energy prices. Despite the four increases already delivered, the latest available figures put annual Australian inflation at 3.9% in Q3, substantially above the central bank’s 2–3% target. Its preferred core measure, the Trimmed Mean Consumer Price Index (CPI), also picked up to 3.7% year-on-year from 3.6% in Q2.

During a recent appearance before Parliament, RBA Governor Bullock said: “Some of the international and domestic upside risks to inflation have materialized or are materializing.”

Bullock also said: “It’s important for the economy that inflation does not diverge from the target for too long,” adding, “since that risks it becoming embedded in inflation expectations, which feeds through to price and wage setting decisions.”

Elevated inflation and Bullock’s remarks make a rate increase at the Board’s meeting appear all but necessary. With that outcome already priced in, attention will turn to her press conference for signals on the next policy steps. Bullock is likely to maintain a hawkish stance and keep further increases on the table, pushing the AUD higher.

25 bps expected: AUD/USD implications of the RBA decision

Near-term support for the Aussie is likely if the RBA raises rates by the expected 25 bps. The extent of any gains, however, will hinge on the hawkishness of the statement and Governor Bullock’s comments. With risk appetite firm ahead of the announcement and the Greenback weaker, a larger increase could spark a near-term AUD rally. Leaving rates unchanged is unlikely, but would send the AUD sharply lower.

FXStreet Chief Analyst Valeria Bednarik offers this technical assessment: “From a technical point of view, the AUD/USD pair is at risk of falling. On the daily chart, the pair found resistance at the start of the week around a flat 100-day Simple Moving Average (SMA) at 0.7030, the immediate resistance level. Last week’s peak at 0.7067 comes next, with the 200-day SMA a handful of pips below the level and also attracting sellers. The same chart shows technical indicators turning south, although holding above their midlines, reflecting the ongoing weakness but falling short of anticipating a steeper decline ahead.”

On the potential price paths, Bednarik says: “A slide below 0.6990 will likely trigger additional slides as buyers will be more keen to give up. The slide, then, could extend towards the 0.6640 region. On the contrary, steady gains beyond 0.7070 could end with the pair re-conquering the 0.7100 mark.”