Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
Australian Dollar Slides Below US$0.70 as Split RBA Rate Decision Clouds Currency Outlook
Highlights:
Australian Dollar Weakens Following RBA Decision
The Australian dollar extended its decline on 4 November 2026, trading near US$0.69710 after slipping below the psychologically important US$0.70 threshold. The currency reached a two-week low as investors reassessed Australia's monetary policy outlook following the Reserve Bank of Australia's (RBA) latest interest rate decision.
Despite a widely anticipated 25-basis-point increase in the cash rate to 4.85% on 3 November, the Australian dollar weakened as the central bank's accompanying signals suggested a less aggressive tightening outlook than markets had expected.
Divided RBA Vote Raises Policy Uncertainty
The RBA's decision marked its fifth interest rate increase in 2026, taking borrowing costs to their highest level since December 2008.
However, the Monetary Policy Board's 6–3 vote revealed differences among policymakers, with three members supporting unchanged rates. The removal of explicit language concerning additional increases further encouraged speculation that the central bank could pause its tightening cycle in December.
Persistent inflation, elevated energy costs and domestic capacity constraints nevertheless remain important considerations for future monetary policy decisions.
Interest Rate Expectations Pressure AUD/USD
Commonwealth Bank of Australia (CBA) economists expect the latest increase could mark the end of the current tightening cycle, although they acknowledge the possibility of further increases in 2027. Meanwhile, expectations of additional US Federal Reserve rate increases could narrow Australia's interest rate advantage over the United States. Such a development may reduce the Australian dollar's relative attractiveness, particularly if US yields remain elevated and global investors favour dollar-denominated assets.
Australian Dollar Outlook: Can US$0.70 Be Reclaimed?
The Australian dollar's near-term direction will likely depend on upcoming inflation releases, central bank commentary and changes in US monetary policy expectations. A sustained recovery above US$0.70 could improve market sentiment, while continued uncertainty surrounding Australia's interest rate outlook may prolong currency weakness. Investors will closely monitor December's RBA decision and incoming economic indicators for clearer evidence of the currency's next direction.
Note- All data presented is based on information available at the time of writing.
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