Reserve Bank of Australia (RBA) Governor Michele Bullock is scheduled to hold a press conference at 4.30 GMT, following the central bank’s decision to lift the benchmark interest rate to 4.10% from 3.85% on Tuesday.
Bullock will take questions from the media as part of a new reporting format for the central bank that started a year ago.
Economic Indicator
RBA Press Conference
Following the Reserve Bank of Australia’s (RBA) economic policy decision, the Governor delivers a press conference explaining the monetary policy decision. The usual format is a roughly one-hour presser starting with prepared remarks and then opening to questions from the press. Hawkish comments tend to boost the Australian Dollar (AUD), while on the opposite, a dovish message tends to weaken it.
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This section below was published at 03:30 GMT to cover the Reserve Bank of Australia’s monetary policy announcements and the initial market reaction.
The Reserve Bank of Australia (RBA) announced on Tuesday that it hiked the Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% from 3.85% after concluding its March monetary policy meeting.
The decision aligned with the market expectations.
Summary of the RBA Monetary Policy Statement
Today’s decision was made by majority.
While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.
Information since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures.
Five members voted to increase rate by 25bps.
The conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation.
The board judged that there is a material risk that inflation will remain above target for longer than previously anticipated.
Four members voted to leave the cash rate target unchanged at 3.85 per cent.
Short-term measures of inflation expectations have already risen.
Board judged that inflation is likely to remain above target for some time and that the risks have tilted further to the upside.
A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025.
The conflict in the Middle East poses substantial risks in both directions.
Developments in the Middle East remain highly uncertain, but under a wide range of possible scenarios could add to global and domestic inflation.
Financial conditions have tightened a little this year, but the extent to which monetary policy is restrictive is uncertain.
AUD/USD reaction to the RBA interest rate decision
The Australian Dollar meets fresh supply in an immediate reaction to the RBA’s decision. The AUD/USD pair drops back to test 0.7050, as of writing, down 0.17% on the day.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.06% | 0.14% | -0.03% | 0.10% | 0.19% | 0.05% | |
| EUR | -0.03% | 0.03% | 0.15% | -0.05% | 0.09% | 0.17% | 0.02% | |
| GBP | -0.06% | -0.03% | 0.13% | -0.09% | 0.05% | 0.13% | -0.01% | |
| JPY | -0.14% | -0.15% | -0.13% | -0.18% | -0.05% | 0.04% | -0.11% | |
| CAD | 0.03% | 0.05% | 0.09% | 0.18% | 0.13% | 0.22% | 0.08% | |
| AUD | -0.10% | -0.09% | -0.05% | 0.05% | -0.13% | 0.08% | -0.06% | |
| NZD | -0.19% | -0.17% | -0.13% | -0.04% | -0.22% | -0.08% | -0.14% | |
| CHF | -0.05% | -0.02% | 0.00% | 0.11% | -0.08% | 0.06% | 0.14% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
This section below was published at 00:30 GMT as a preview of the Reserve Bank of Australia’s monetary policy announcements.
- The Reserve Bank of Australia is expected to deliver another 25 bps hike, lifting the interest rate to 4.10% in March.
- Eyes on RBA Governor Bullock’s press conference for cues on the monetary policy path outlook.
- The Australian Dollar is poised for a big reaction to the RBA policy announcements.
The Reserve Bank of Australia (RBA) is set to deliver another 25 basis points (bps) interest rate hike following its March monetary policy meeting on Tuesday, lifting the Official Cash Rate (OCR) to 4.10% from 3.85%.
The decision will be announced on Tuesday at 03:30 GMT, accompanied by the Monetary Policy Statement (MPS). RBA Governor Michele Bullock’s press conference will follow at 04:30 GMT.
The Australian Dollar (AUD) is primed for intense volatility in reaction to the RBA policy announcement and Bullock’s presser.
RBA rate hike is a done deal amid energy-driven inflation risks
As the war in the Middle East continues, central banks globally face a tough call over whether to look through the energy-driven inflation shock or push back against it and risk derailing the economic recovery.
However, the RBA seems well-positioned to counter looming inflation risks by raising the OCR as the economy remains on a solid footing.
Data from the Australian Bureau of Statistics (ABS) showed the Gross Domestic Product (GDP) rose 0.8% in the fourth quarter of 2025, above an upwardly revised 0.5% in the previous quarter and the market consensus of 0.6%. Annual growth accelerated to 2.6%, the fastest pace since early 2023.
Meanwhile, the monthly Consumer Price Index (CPI) rose 0.4% in January, beating estimates of a 0.3% increase. Moreover, the annual inflation reading held at a firm 3.8%, above forecasts for a deceleration to 3.7%.
During a speech at the AFR Business Summit in Sydney on March 2, Governor Michele Bullock said that the Board was uncertain if financial conditions were sufficiently restrictive to return inflation to the midpoint of the target in a reasonable timeframe, highlighting that developments in the Middle East serve as a reminder of persistent geopolitical uncertainty, and warning that a prolonged shock could add to inflation pressures
Last week, RBA Deputy Governor Andrew Hauser warned that Oil price shocks pose upside risks to inflation amid uncertainty tied to the Iran conflict.
“Volatility in Oil prices and tensions in the Middle East pose a genuine challenge for us [the central bank].” However, “The Australian economy in many ways is in good shape,” he said.
Against this backdrop, ANZ, Westpac, Deutsche, Citi and the National Australia Bank (NAB) revised their call, projecting a rate hike this week.
How will the Reserve Bank of Australia’s decision impact AUD/USD?
The AUD is finding its feet against the US Dollar (USD) as it braces for the RBA showdown.
AUD/USD could stage a solid recovery if the RBA’s MPS and Governor Bullock’s words suggest that rate hikes are here to stay.
On the other hand, the Aussie pair could continue to face bearish pressure if Bullock warrants caution on future rate hikes and delivers a wait-and-see guidance.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD following the policy announcement.
“The major has slipped under the 21-day Simple Moving Average (SMA) near 0.7070, signaling a loss of short-term upside momentum. The 14-day Relative Strength Index (RSI) has retreated toward the mid-40s, indicating fading bullish pressure and reinforcing the corrective tone after the pair failed to sustain gains above 0.7100.”
“Immediate resistance emerges at the 21-day SMA around 0.7070, followed by the 0.7120 area, which limited the pair in February, acting as the next barrier, and 0.7150 capping the topside beyond there. On the downside, initial support is at 0.6980, which supported the sharp decline on Friday, guarding a deeper pullback toward 0.6960, where the 50-day SMA currently rises. A break below that zone would expose the 100-day SMA around 0.6770,” Dhwani adds.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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