Exness: The RBA will raise interest rates again next week, and the Australian dollar remains volatile.

Markets now expect the Reserve Bank of Australia (RBA) to hike rates next week—its fourth increase in 2026—lifting the cash rate from its current 4.35% to 4.60%. Yet, if markets are increasingly convinced the RBA will hike again, why isn’t the Australian dollar continuing to rise? The biggest factor forcing the RBA back toward tightening this time is still inflation. The previous three hikes have already pushed the cash rate up to 4.35%, yet RBA Governor Michele Bullock explicitly warned last week that some previously anticipated upside inflation risks are now materializing—and it remains uncertain whether the cumulative 75 basis points of hikes this year will prove sufficient. The Middle East conflict briefly pushed Brent crude oil prices back above USD 100 per barrel. Australian households now face not only higher mortgage repayments but also potentially rising costs for gasoline, electricity, transportation, and business input expenses. This means the inflation slowdown the RBA had hoped for may be delayed once again by energy prices. According to Eric, an analyst at Exness, this forms the Australian dollar’s most critical current support. Markets are no longer debating *whether* the RBA will hike again; instead, they’re asking: After next week’s hike, will there be another? Next week’s move is increasingly looking less like a surprise. Major Australian banks widely anticipate the RBA will lift rates on 29 September, and markets have already priced in this move extensively. In other words, if the RBA simply raises the rate from 4.35% to 4.60% and then signals it will pause to assess incoming data, that action alone may not be enough to propel the Australian dollar beyond its recent highs. What markets now want is not just “one more hike.” If RBA officials continue emphasizing widening risks—including energy costs, domestic demand pressures, and persistent inflation—the market may further revise upward its expectations for future hikes, thereby providing fresh support for the Australian dollar. But if oil prices continue falling, the picture becomes more complicated. Brent crude has already retreated from its recent highs this week. Saudi exports have resumed, and markets are newly hopeful about potential diplomatic progress between the U.S. and Iran—easing concerns over energy supply.

ETO Markets: The RBA hikes rates again; third monetary tightening this year.

On 29 September, the Reserve Bank of Australia (RBA) officially raised its cash rate target by 25 basis points to 4.60%. The decision received unanimous approval from the Monetary Policy Board. This marks the RBA’s third rate hike of the year, driven primarily by the simultaneous materialization of multiple domestic and external inflationary pressures—and by the slower-than-expected pace of price declines. Even as signs of economic slowdown emerge, the central bank opted to intensify monetary tightening, sending a clear policy signal: it remains resolute in curbing high inflation and preventing price increases from becoming entrenched. The core rationale behind this hike is that all previously flagged upside inflation risks have now fully materialized. Overall price levels remain persistently elevated, and several key indicators have exceeded earlier market expectations. Externally, escalating geopolitical tensions in the Middle East have disrupted global oil supply dynamics, pushing international energy prices sharply higher—well beyond the RBA’s August forecast range—and directly amplifying imported inflationary pressure in Australia. Meanwhile, rapid global growth in the artificial intelligence sector has spurred surging demand for related equipment and technology goods, driving up prices across tech categories worldwide and emerging as a new global inflationary driver. Beyond external shocks, domestic inflationary pressures in Australia remain substantial. Local businesses continue grappling with rising raw material and operational costs; most have already increased—or plan to increase—prices for their goods and services, sustaining upward momentum in end-consumer prices. Coupled with persistently elevated short-term inflation expectations, these factors collectively reinforce a stronger-than-anticipated overall inflation trajectory—shattering earlier hopes of a gentle, orderly disinflation process. Notably, the broader Australian economy is already showing signs of cooling, with growth exhibiting marked structural divergence. Household consumption is gradually softening; property prices in major capital cities continue to decline; and new housing loan volumes have contracted significantly—indicating broad weakness in the real estate market. At the same time, the previously tight labor market is gradually easing, while employment-related leading indicators remain stable—further confirming ongoing economic deceleration. Yet this economic slowdown has *not* been accompanied by a corresponding drop in inflation. Instead, several economic and inflation metrics have strengthened at the margin—exceeding the RBA’s prior forecasts. Quarterly GDP output, for instance, outperformed expectations; business investment and growth in household debt remain robust; and domestic capacity gaps persist—meaning ongoing supply-demand imbalances continue underpinning price resilience.

Australia Raises Key Rate to 15-Year High to Restrain Inflation

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The Reserve Bank of Australia raised interest rates to 4.6%, citing rising energy costs and global oil supply disruptions linked to the US-Iran war as key drivers of inflation.

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