Aussie Dollar Slides After RBA Rate Hike

The Australian dollar fell 2.3 per cent against the US dollar last week, its lowest level since March, after the Reserve Bank raised the cash rate.

Updated on Nov. 9, 2026 in Economic Indicators

Aussie Dollar Slides After RBA Rate Hike

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The Australian dollar fell 2.3 per cent against the US dollar last week to about 68.66 US cents, finishing at its lowest level since March. The Reserve Bank of Australia raised the cash rate to 4.85 per cent on Tuesday in a 6-to-3 vote.

Why it matters

The Australian dollar fell as shifting interest rate expectations followed the RBA's rate hike, while weaker oil and copper prices also weighed on the currency. The rate rise marks five hikes this year, bringing the cash rate to its highest level since 2008.

The Reserve Bank's cash rate rose to 4.85 per cent in a 6-to-3 board vote, the highest since 2008 after five hikes this year. Whether rates have peaked remains unclear, as markets are split on the outlook.

The players

Reserve Bank of Australia

Australia's central bank, responsible for monetary policy and setting the cash rate that influences borrowing costs across the economy.

Commonwealth Bank

One of Australia's major banks, which has forecast that economic growth will trough at 1 per cent a year in mid 2027 and warned of further downside risk to the dollar.

The details

The Australian dollar was the worst-performing major currency last week, and fell 0.5 per cent directly after the Tuesday rate hike. Brent crude traded near US$98 a barrel on Friday night, while copper fell to US$13,883 a tonne, its lowest since July.

Tuesday: Reserve Bank of Australia raises cash rate to 4.85 per cent.
Last week: Australian dollar falls 2.3 per cent against the US dollar.
Friday: Copper falls to its lowest level since July.
Mid 2027: Commonwealth Bank expects growth to trough at 1 per cent a year.
December 2027: Markets are pricing in a rate cut.

Macro View

The 4.85 per cent cash rate is the highest since 2008, following five hikes this year under the Reserve Bank's current tightening cycle. Markets now price a rate cut by December 2027, a sharp reversal from the tightening trend.

Borrowers with variable-rate home loans and business debt face higher repayments following the 4.85 per cent cash rate. A weaker Australian dollar also makes imported goods, including fuel, more expensive for households.

The takeaway

A rising cash rate and a weaker dollar together raise the cost of borrowing while lifting import prices, so households with variable-rate debt should review their budgets. Watch for signals on whether rates have peaked before locking in long-term commitments.