The Australian dollar is hovering near a seven-month low as traders bet the Federal Reserve will keep raising US rates while the Reserve Bank of Australia may be done after lifting its policy rate to an 18-year high last week.
MoneyTurkey Foreign Markets Desk | 11 November 2026
Key points
- The Australian dollar fell nearly 1% on Tuesday to its lowest level in more than seven months after hotter-than-expected US inflation data.
- It steadied near 68.8 US cents on Wednesday, still close to that low.
- Traders are largely ruling out another RBA hike in December after a slide in consumer and business confidence.
- The RBA raised its policy rate to 4.85% on 3 November, the highest since late 2008 and its fifth increase this year.
What happened
The Australian dollar dropped to its weakest level in more than seven months against the US dollar in late US trading on Tuesday, after October consumer prices rose more than expected and Fed Governor Christopher Waller said a half-point December hike should be considered if core inflation came in around 0.3%, which it did, according to Dow Jones Newswires via MarketWatch and Investing.com.
The currency edged back on Wednesday and was trading near 68.8 US cents, according to ABC News and Dow Jones.
US rate markets now price about a 91% chance of a quarter-point Fed hike in December, according to Investing.com, citing CME Group data, with Reuters via Business Recorder putting the figure at 91.9%.
Why it matters
The gap in rate expectations is moving the other way for Australia. The RBA lifted its policy rate by 25 basis points to 4.85% on 3 November in a six-to-three vote, its fifth increase of 2026, according to the RBA and ABC News.
Since then, weak housing data and a sharp drop in consumer and business confidence have traders largely ruling out a further RBA increase in December, Dow Jones reported. StoneX said the confidence slide was building the case for an RBA pause.
Ray Attrill, head of FX strategy at National Australia Bank, told Dow Jones there was no reason to expect a bounce in the Australian dollar for now.
Local market
The S&P/ASX 200 edged higher on Wednesday to close at 9,143.7, after a 1.1% gain on Tuesday, leaving it within about 1.5% of its 6 August record high, according to Yahoo Finance and Investing.com.
What to watch
- Further Fed comments ahead of the 8 and 9 December meeting
- Australian jobs and inflation data before the RBA’s December decision
- Whether US stock weakness adds pressure on the risk-sensitive Australian dollar
For information only. Not investment advice.
Sources
- Dow Jones Newswires via MarketWatch: https://www.marketwatch.com/story/australian-dollar-undermined-by-shifting-bets-on-rates-05626483
- Investing.com: https://au.investing.com/news/forex-news/asia-fx-steadies-after-falling-on-hot-us-inflation-yen-near-6wk-low-4760567
- Reuters via Business Recorder: https://www.brecorder.com/news/40448388
- ABC News markets live, 11 November: https://www.abc.net.au/news/2026-11-11/asx-markets-business-live-news-nov-11/107370848
- Reserve Bank of Australia, 3 November decision: https://www.rba.gov.au/media-releases/2026/mr-26-30.html
- ABC News, 3 November: https://www.abc.net.au/news/2026-11-03/rba-lifts-interest-rates-november-2026-highest-rate-in-18-years/107340050
- StoneX: https://www.stonex.com/en-gb/news-and-analysis/au-consumer-and-business-confidence-slide-building-the-case-for-an-rba-pause-2026-11-10/
- Investing.com (S&P/ASX 200 close): https://www.investing.com/indices/aus-200
- Yahoo Finance (ASX 200 data): https://finance.yahoo.com/quote/%5EAXJO/history/
