Australian Dollar Gains Policy Support as RBA Flags Renewed Inflation Risk

The Australian dollar is receiving support from a more cautious monetary-policy outlook after Reserve Bank of Australia Governor Michele Bullock highlighted renewed upside risks to inflation. Bullock said on Tuesday that persistent energy prices and continued excess demand at home could push inflation higher than previously expected. Her comments came ahead of the RBA's September 29 policy meeting. Australia's cash rate currently stands at 3.60%. Markets are considering the possibility of another increase as policymakers assess whether inflation risks are becoming more persistent. The labour market is also central to the outlook. Bullock noted that unemployment in a range of 4.5% to 5.0% could help restrain inflation, with the current unemployment rate around 4.5%. For AUD/USD, the combination of domestic rate expectations and global dollar strength creates a two-sided setup. A more hawkish RBA can support the Australian dollar, while a stronger US dollar can limit gains. MarketMindFX View: AUD/USD will remain sensitive to RBA communication ahead of September 29. Traders should monitor energy prices, Australian labour conditions and the US rate outlook for the next major directional signal. Key Levels: AUD/USD Support: 0.6600, 0.6550 AUD/USD Resistance: 0.6700, 0.6750 Source: Reuters, September 22, 2026. MarketMindFX analysis.