Australian Dollar Breaks Above 0.70 As RBA Inflation Warning Fuels November Hike Bets

The Australian dollar has climbed back above 0.70 against the US dollar, recovering from a weakest-since-July low earlier this month, after hawkish Reserve Bank of Australia commentary fueled bets on another rate hike at the bank’s November 3 meeting.

Executive Summary:

• AUD/USD is trading near 0.7018, recovering from a mid-October low around 0.6894, its weakest level since early July.
• The Reserve Bank of Australia raised its cash rate to 4.60% in September, its fourth hike this year, in a unanimous decision.
• RBA Deputy Governor Andrew Hauser said the inflation outlook appears worse than forecast, a comment that lifted the currency and fueled bets on a further hike at the November 3 meeting.

Macro Breakdown: The Australian dollar’s round trip this month captures a genuine tension in the domestic data: softer labor market readings, including rising unemployment and job losses, had initially dragged the currency to its weakest since early July, before hawkish RBA commentary on inflation reversed that move entirely. Hauser’s specific framing, that the inflation outlook looks worse than the central bank had forecast, directly increases the odds of a fifth hike this year even against a backdrop of a cooling jobs market, a combination that makes the Reserve Bank’s actual November decision considerably harder to call than the unanimous September vote was.

Social Proof: Commentary on the Reserve Bank’s hawkish tilt through September specifically highlighted how officials were already weighing further tightening even before this month’s inflation warning.

Currency Pair & Market Impact: AUD/USD’s recovery back above 0.70 reflects markets repricing toward a more hawkish Reserve Bank path, a dynamic that could extend further if upcoming Q3 inflation data confirms Hauser’s warning rather than showing the deceleration the bank had previously expected. The currency’s swing from a five-year-adjacent low to recovering above 0.70 within the same month underscores just how sensitive it currently is to shifts in the domestic inflation and rate narrative specifically, more so than to broader US dollar moves.

Forward-Looking Outlook: The RBA’s November 3 meeting is the next clear catalyst, though the board’s own minutes reportedly do not commit it to a hike, leaving genuine uncertainty about whether Hauser’s comments translate into an actual fifth rate increase or simply keep the option open without acting immediately. Incoming Q3 inflation data before that meeting will likely be the deciding factor in which direction the Reserve Bank ultimately leans.

Disclaimer: The content provided on this page is for informational and educational purposes only and does not constitute financial advice. Trading financial markets involves significant risk. Consult with a certified financial advisor before making any investment decisions.