RBA Interest Rate Decision: A Fifth Hike to 4.85%?

The Reserve Bank of Australia announces its next interest rate decision at 03:30 UTC on Tuesday 3 November, after raising its cash rate four times this year to 4.60%, the highest level since 2011. Hotter-than-expected inflation data have led markets to price a fifth rise, to 4.85%, as highly likely. With fuel costs still climbing and the RBNZ's surprise hold last week showing that priced-in moves are never guaranteed, the outcome could set the tone for the Australian dollar.

RBA interest rate decision in brief

• The RBA announces its decision at 03:30 UTC on Tuesday 3 November, together with its quarterly Statement on Monetary Policy, followed by Governor Michele Bullock's press conference at 04:30 UTC.
• The market-implied probability of a quarter-point rise to 4.85% rose sharply after the inflation data on 28 October, according to the ASX RBA Rate Tracker, which is based on 30-day interbank cash rate futures.
• Annual inflation rose to 4.3% in September, above the 4.2% forecast, while the RBA's preferred core measure, the trimmed mean, rose 1.0% in the September quarter, above the RBA's own 0.8% forecast.
• Brent crude has held above $100 a barrel, trading broadly between $105 and $120 in the second half of October, keeping fuel prices and headline inflation high.
• AUD/USD has traded in a broad 0.6850–0.7150 range since late September, while AUD/NZD has climbed toward 1.2580 after the RBNZ held rates unexpectedly on 28 October.

What is the RBA interest rate decision and when is it announced?

The Reserve Bank of Australia's Monetary Policy Board sets the cash rate target, the interest rate at which banks lend to each other overnight. Changes to it flow through to mortgage rates, borrowing costs and the value of the Australian dollar, which is why the RBA interest rate decision is a key event for traders of AUD/USD, AUD/NZD and other AUD pairs.

The Board meets eight times a year and announces its decision at 2:30 p.m. Sydney time. The November decision is due at 03:30 UTC on Tuesday 3 November, as shown on our economic calendar, with the Governor's press conference at 04:30 UTC. This meeting also includes the quarterly Statement on Monetary Policy, with updated forecasts for growth and inflation.

What markets and economists expect

Expectations have shifted quickly. Expectations of a November rise were low in mid-October. That changed after Deputy Governor Andrew Hauser said on 21 October that the inflation outlook looked materially worse than the RBA had projected in August, and again after the inflation data on 28 October, when markets moved to price a rise as highly likely. Traders can follow the latest market-implied probabilities on the ASX RBA Rate Tracker, which is updated at the end of each trading day.

Economists have moved in the same direction. Australia's four largest banks were reported to expect a quarter-point rise after the inflation figures, including those that had previously forecast a hold. Ahead of the RBA interest rate decision, the debate has therefore moved from whether the RBA hikes to whether it signals that more increases may follow.

Why this RBA interest rate decision matters now

The RBA has raised its cash rate four times in 2026, in February, March, May and September, reversing all of its 2025 cuts and taking the rate to 4.60%, the highest level since November 2011. The September decision was unanimous.

The latest inflation data strengthened the case for further action. Annual inflation rose to 4.3% in September from 4.0% in August, above the 4.2% forecast. Headline prices rose 1.3% in the September quarter, up from 0.6% in the June quarter. The trimmed mean, which strips out the most extreme price changes and is the RBA's preferred measure of underlying inflation, rose 1.0% over the quarter and 3.7% over the year, above the RBA's 2%–3% target range. Services inflation also picked up to 4.1%.

Our guide to Australia's CPI explained covers how these measures work and why the trimmed mean matters most to the RBA.

The economy is sending a more mixed message. Growth has slowed and the labour market has softened, with unemployment at 4.7% in September. In simple terms: inflation well above target argues for another rise, while slower growth and higher unemployment are reasons the RBA may signal caution about how far it needs to go.

How oil prices are feeding Australian inflation

Fuel is a major driver of headline inflation. Petrol prices rose by around 9% in September alone, as crude oil climbed amid conflict in the Middle East and disruption to refining and shipping. Brent crude has held above $100 a barrel and climbed to near six-month highs in late October.

Australia imports most of its refined fuel, so higher crude prices reach the pump quickly and raise transport costs across the economy. At the same time, Australia is a major exporter of energy commodities such as liquefied natural gas and coal, which can support national income and the currency. For the RBA, the risk is that higher fuel costs spread into services prices and inflation expectations, which is why rising services inflation is a key concern.

Hot inflation puts a fifth hike in view

Four things to watch on 3 November

1. The decision

A quarter-point rise to 4.85% would be the RBA's fifth increase this year. A hold would surprise markets that have priced the move as highly likely.

2. The Statement on Monetary Policy

Updated forecasts will show how long the RBA expects inflation to stay above target. Higher inflation projections, or a later return to the middle of the target range, would support expectations of further rises.

3. Governor Bullock's press conference

Any hint about whether more increases may be needed, or that rates are close to their peak, could move the Australian dollar more than the decision itself.

4. The vote

The RBA publishes an unattributed vote count. A split decision would suggest some Board members want to wait, while a unanimous rise would reinforce the hawkish message.

Lessons from the RBNZ surprise

The Reserve Bank of New Zealand offered a reminder of the risks last week. On 28 October, markets had priced around a 90% chance of a rise, yet the RBNZ held its rate at 2.75% in a 4–3 vote, and the New Zealand dollar fell sharply against every major currency. The RBNZ said further increases were likely but conditional on the outlook. Our RBNZ rate decision preview covers the background to that meeting.

The lesson for the RBA interest rate decision is that a highly priced move is not a certain one. If the RBA also chose to wait, the reaction in the Australian dollar could be large precisely because a rise is so widely expected.

How the RBA interest rate decision could move AUD/USD

AUD/USD shows how many US dollars one Australian dollar buys, so a rising pair means a stronger Australian dollar. The pair fell from around 0.7135 in late September to the 0.6900 area in early October, then traded in a 0.6900–0.7050 range for most of the month. It rose toward 0.7060 after the inflation data and was trading around 0.7020 at the time of writing.

The rate gap with the United States also matters. The US Federal Reserve held its rate at 3.75%–4.00% on 28 October, leaving the RBA's cash rate above US rates. A rise to 4.85% would widen that advantage, while a hawkish Fed could offset it. Our Fed interest rate decision preview explains the US side.

AUD/USD has been trading in a broad 0.6850–0.7150 range. Reference levels traders are watching:

• 0.7150: the late-September high area
• 0.7100: the first resistance area above the October highs
• 0.6900: the October low area
• 0.6850: the next support area below

A more hawkish outcome could support the Australian dollar and lift AUD/USD toward 0.7100 and 0.7150. A more dovish outcome, such as a surprise hold, could push it back toward 0.6900 and 0.6850.

Source: TIOmarkets MT5, AUDUSD H4 chart, 2 November 2026.

How the RBA interest rate decision could move AUD/NZD

AUD/NZD shows how many New Zealand dollars one Australian dollar buys, so a rising pair means a stronger Australian dollar against the New Zealand dollar. The pair has climbed steadily over the past year, from around 1.14 in November 2025 to above 1.24 in October 2026. It jumped to near 1.2580 after the RBNZ's surprise hold on 28 October, its highest level in at least a year, and was trading around 1.2490 at the time of writing.

The main driver is the gap between the two central banks. The RBA's cash rate of 4.60% is well above the RBNZ's 2.75%, and a rise to 4.85% would widen that gap further while New Zealand waits until December.

AUD/NZD has been trading in a broad 1.2100–1.2700 area since September. Reference levels traders are watching:

• 1.2700: the next round-number resistance area
• 1.2580: the late-October high
• 1.2270: the October low area
• 1.2100: the early-September breakout area

A more hawkish RBA could extend the rise toward 1.2580 and 1.2700. A more dovish outcome could pull the pair back toward 1.2270 and 1.2100.

All levels are context markers, not entry or exit points, and should be checked against a live price feed.

A widening rate gap lifts AUD/NZD toward 1.25

Three scenarios: better than expected, as expected or worse than expected

In this table, "better" means a softer, more dovish outcome than markets expect, and "worse" means a tighter, more hawkish one, from the perspective of borrowing costs. A more hawkish outcome tends to support the Australian dollar, which means a higher AUD/USD and AUD/NZD.

Scenario thresholds are editorial guideposts, not forecasts or trading recommendations.

A mixed message may create the hardest reaction

The most difficult outcome to read is a split signal, such as a rise paired with language suggesting rates are now close to their peak. In that case, the first move in the Australian dollar may reverse as traders weigh the decision against the guidance. The announcement comes during Asian trading hours, when liquidity can be thinner, spreads can widen and slippage can occur.

Key events to watch

• Tuesday 3 November, 03:30 UTC: RBA interest rate decision and Statement on Monetary Policy
• Tuesday 3 November, 04:30 UTC: Governor Bullock's press conference
• Tuesday 3 November: US midterm elections
• Friday 6 November, 13:30 UTC: US jobs report for October
• Wednesday 25 November, 00:30 UTC: Australia's monthly inflation data for October
• Wednesday 9 December: RBNZ decision with a full Monetary Policy Statement, and the next Fed decision

Risks and uncertainties

With a rise largely priced in, the reaction may depend more on the RBA's guidance and forecasts than on the decision itself, and the RBNZ's surprise shows that even highly expected moves can be skipped. Oil prices remain highly sensitive to developments in the Middle East, and a sharp move in fuel costs could change the inflation outlook quickly. US data, the Fed's path, China's economy and global risk sentiment can all outweigh the RBA's influence on the Australian dollar.

Market direction is not mechanical. Positioning, liquidity and global risk appetite can outweigh the usual relationship between central-bank signals and currencies, and prices can gap or reverse rapidly around the announcement.

Conclusion

The RBA interest rate decision on 3 November looks set to deliver a fifth rise this year, with markets pricing a move to 4.85% as highly likely. Inflation at 4.3%, core inflation above target and rising fuel costs support that view, even as growth slows. Because the rise is largely priced in, the RBA's guidance and new forecasts may matter most for AUD/USD and AUD/NZD, while the RBNZ's recent surprise is a reminder that a hold would carry a larger reaction.