AUD/USD Forecast: Natixis Backs November Hike but Sees Limits Beyond It
The Australian Dollar slips against the US Dollar as Natixis backs another rate rise, while softer jobs and spending cloud the path beyond November.
The Australian to US Dollar exchange rate fell to $0.7032 on Thursday, down 0.34%.
Euro to Australian Dollar (EUR/AUD): 1.585531 (-0.37%)
Natixis expects the Reserve Bank of Australia to raise interest rates again on 3 November, despite signs that higher borrowing costs are slowing household demand.
After Wednesday’s inflation release, economists Alicia Garcia Herrero and Haoxin Mu wrote:
“Given today’s hot CPI print, we believe the RBA will favor a back-to-back hike on next Tuesday’s (November 3) monetary policy meeting.”
The RBA raised its cash rate to 4.60% at its previous meeting in September.
The CPI release strengthened earlier November hike expectations at Crédit Agricole and Goldman Sachs.
Travel costs raise a question about energy spillovers
Natixis’s economists write:
“Headline inflation accelerated in September to 0.83%mom and 4.34%yoy, both higher than the consensus forecast of 0.7%mom and 4.2%yoy.”
Its breakdown shows travel contributed more to the monthly headline increase than energy itself.
“Given the sensitivity of travel prices to fuel cost, this month’s print suggests the energy shock has started to pass through to the broader CPI basket, which is a warning signal to the RBA.”
The Australian Bureau of Statistics attributes higher domestic holiday travel and accommodation prices to demand during school holidays and major sporting events.
Natixis’s interpretation therefore raises a risk for policymakers without establishing how much of the travel increase will persist once those seasonal pressures ease.
Underlying inflation has not followed the expected decline
The trimmed mean, which reduces the impact of unusually large price changes, also concerns Natixis:
“Meanwhile, the underlying inflation trend, measured by trimmed mean CPI, is deviating from the trajectory that RBA had envisioned. The quarterly trimmed mean inflation printed 3.66%yoy, another uptick from 3.64% in Q2.”
The increase is small, but the rate has failed to turn lower as the RBA envisaged in August, when it projected a decline towards 3.3% by end-2026.
These are annual rates in the quarterly series, distinct from the monthly trimmed-mean measure.
The RBA’s 3 November decision will be accompanied by updated economic forecasts, allowing policymakers to reassess that trajectory.
The economists add:
“Moving forward, the RBA may keep its hawkish rhetoric given the untamed inflation, but as the labor market shows signs of easing and household spending starts to slow amid higher interest rates, we expect the next decision beyond November to be highly data dependent.”
What This Means for AUD/USD
For the Australian Dollar, a November increase would leave the subsequent guidance important. Natixis’s call does not assume an uninterrupted series of further hikes.
Persistent price pressure beyond seasonal travel would strengthen the case for keeping Australian rates higher, potentially supporting the currency through expectations of better returns.
If slower hiring and spending instead help inflation ease, that support could fade.
Our currency coverage draws on live market data, official economic releases and published bank research.
