RBA Decision to Spark or Stabilize AUD/USD

The Australian dollar's recent stability against the U.S. dollar may continue if the Reserve Bank of Australia (RBA) maintains its hawkish stance in its upcoming monetary policy decision on September 29.

Markets are expecting another interest rate increase, with implied probabilities showing more than a 90% chance of an outcome from 4.35% to 4.60%. The expected rate hike is largely priced in, but traders will focus on any signals regarding the future path of monetary policy.

Inflation remains the key variable, and Australia's latest inflation figures showed a gradual slowdown from 4.6%, but still remained at 3.5%, above the central bank's 2% target. August inflation figures are scheduled for release later this week, with consensus expectations pointing to a rebound toward 4.1%.

The situation is particularly important as the Australian dollar spent much of 2026 recovering ground against the U.S. dollar. However, part of that strength has faded due to increasing prices in a more aggressive Federal Reserve.