The Reserve Bank of Australia (RBA) published the Minutes of its November monetary policy meeting on Tuesday, which showed that board members signalled a more balanced policy stance, adding that it could keep the cash rate unchanged for longer if incoming data proves stronger than expected
Additional takeaways
Members commenced their discussion of financial conditions by considering central bank policy settings in advanced economies.
Members noted that Australian financial conditions had eased over the course of the year as the cash rate had been reduced.
Members considered their assessment of whether financial conditions overall were still restrictive. A range of indicators painted a mixed picture, in contrast to the clear signals apparent in 2024.
Some other indicators suggested that financial conditions could be on the accommodative side: risk premia in capital markets were low; funding was readily available; and the spread to the cash rate for both bank funding costs and lending rates was notably below pre-pandemic levels.
However, other indicators were consistent with financial conditions still being a little restrictive.
Members noted that market expectations for the policy rate in Australia had shifted significantly higher since the August Statement on Monetary Policy.
The bank’s tone on the labour market has shifted after October employment surged and the jobless rate fell back to 4.3%, helping markets scale back expectations for further cuts.
The board acknowledged that if growth disappoints or the labour market weakens materially, more easing may be needed.
The RBA noted the Australian dollar remains near its estimated fair value and said global downside risks have eased, even as global growth is expected to slow in the second half of 2025.
Market reaction
At the time of press, the AUD/USD pair is down 0.13% on the day at 0.6483.
Australian Dollar Price This week
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.31% | 0.11% | 0.42% | 0.23% | 0.80% | 0.48% | 0.25% | |
| EUR | -0.31% | -0.09% | 0.49% | -0.06% | 0.48% | 0.18% | -0.04% | |
| GBP | -0.11% | 0.09% | 0.33% | 0.03% | 0.58% | 0.28% | 0.05% | |
| JPY | -0.42% | -0.49% | -0.33% | -0.18% | 0.39% | 0.05% | -0.20% | |
| CAD | -0.23% | 0.06% | -0.03% | 0.18% | 0.57% | 0.24% | 0.02% | |
| AUD | -0.80% | -0.48% | -0.58% | -0.39% | -0.57% | -0.29% | -0.51% | |
| NZD | -0.48% | -0.18% | -0.28% | -0.05% | -0.24% | 0.29% | -0.22% | |
| CHF | -0.25% | 0.04% | -0.05% | 0.20% | -0.02% | 0.51% | 0.22% |
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 was published on November 18 at 22.30 GMT as a preview of the RBA Minutes release.
The RBA Minutes Overview
The Reserve Bank of Australia (RBA) will publish its minutes of its monetary policy meeting on Tuesday at 00.30 GMT. It provides a detailed record of the discussions held between the RBA’s board members on monetary policy and economic conditions that influenced their decision on adjusting interest rates and/or bond buys, significantly impacting the AUD.
The minutes also reveal considerations on international economic developments and the exchange rate value.
How could the RBA Minutes affect AUD/USD?
AUD/USD trades on a negative note on the day in the lead up to the RBA Minutes. The pair loses ground as the US Dollar strengthens as traders continue to gauge upcoming US data releases and the likelihood of further rate cuts by the Federal Reserve (Fed).
If the RBA is hawkish about the inflationary outlook for the economy, it could lift the Australian Dollar (AUD), with the first upside barrier seen at the 100-day EMA of 0.6525. The next resistance level emerges at the November 13 high of 0.6580, en route to the October 6 high of 0.6620.
To the downside, the October 10 low of 0.6472 will offer some comfort to buyers. Extended losses could see a drop to the July 31 low of 0.6424. The next contention level is located at the 0.6400 psychological level.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.