Near two-week low: Australian Dollar struggles as post-RBA losses persist despite weak USD

25 bps: the RBA’s widely anticipated rate rise leaves AUD/USD under selling pressure for a second consecutive day.
A bleak economic outlook and the 6-3 voting split put the Australian Dollar under substantial pressure.
Ahead of the US elections, hopes for diplomacy with Iran pressure the USD but offer no support to spot prices.

AUD/USD is down around 0.15% on the day. The pair remains near the 0.6980-0.6975 region in the second half of Tuesday’s Asian session, retaining losses triggered by the Reserve Bank of Australia (RBA).

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

At the close of its November policy meeting, the RBA delivered a widely anticipated 25 basis points (bps) increase in the official cash rate to 4.85%. Its fifth rise this year took the rate to its highest since November 2008. Support for the decision was far from unanimous: three members favoured leaving rates at 4.60%. A bleak economic outlook from the central bank also weighed on the Australian Dollar (AUD). The currency fell for a second consecutive day, recording its third decline in the past four days.

A return to the 2–3% inflation target range is now expected by the RBA only in late 2027, around three quarters later than its previous forecast. Restrictive financial conditions are expected to constrain activity, keeping GDP growth subdued and below trend. The unemployment rate is also projected to edge higher, reaching around 5.1% by late 2028. These factors largely outweigh weakness in the US Dollar (USD), supporting the case for further near-term declines in AUD/USD.

Hopes for diplomacy with Iran are keeping the safe-haven US Dollar under pressure as investors assess Monday’s strong US ISM Manufacturing PMI. US President Donald Trump said on Monday that Iran wants a deal to end the war and that an agreement could be reached. Iran’s President Masoud Pezeshkian also said Tehran is looking to resolve problems through dialogue. Even so, traders remain broadly reluctant to act ahead of the US midterm elections, which will determine control of Congress.

Democrats are strongly favoured by prediction markets to take control of both the House of Representatives and the Senate. A Republican sweep, by contrast, would be a bigger surprise for markets. Either way, the result should generate some market volatility and give the USD and AUD/USD fresh impetus. Friday’s US Nonfarm Payrolls (NFP) report remains the main focus. Before then, US JOLTS Job Openings could create short-term opportunities later in the North American session.

Australian Dollar: This Week’s Currency Moves

Against the major currencies listed below, the Australian Dollar (AUD) recorded its strongest performance this week against the Japanese Yen. The table sets out its percentage changes over the week.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.33%	-0.20%	0.22%	0.00%	0.72%	0.06%	-0.70%
EUR	0.33%		0.11%	0.49%	0.31%	0.97%	0.36%	-0.39%
GBP	0.20%	-0.11%		0.25%	0.22%	0.87%	0.25%	-0.50%
JPY	-0.22%	-0.49%	-0.25%		-0.18%	0.50%	-0.23%	-1.00%
CAD	-0.00%	-0.31%	-0.22%	0.18%		0.70%	-0.05%	-0.71%
AUD	-0.72%	-0.97%	-0.87%	-0.50%	-0.70%		-0.60%	-1.35%
NZD	-0.06%	-0.36%	-0.25%	0.23%	0.05%	0.60%		-0.81%
CHF	0.70%	0.39%	0.50%	1.00%	0.71%	1.35%	0.81%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the Australian Dollar on the left and following its row across to the US Dollar gives the percentage change for AUD (base)/USD (quote) in the corresponding cell.