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Tuesday’s Reserve Bank of Australia decision is, for all practical purposes, already made. All four major Australian banks now expect the RBA to hike again on November 3, taking the cash rate to 4.85%. Headline CPI rose 4.3% annually, while the trimmed mean came in at 3.6%, both hotter than expected and reinforcing concerns that inflation is proving stickier than the central bank had hoped. When NAB, ANZ, CBA, and Westpac line up in identical forecasts, you are not watching a debate. You are watching confirmation.

CBA’s economists describe the expected 25-basis-point increase as an “insurance hike” to guard against inflation staying higher for longer. With major banks now aligned on a November hike, the decision itself is close to fully priced. The real question now sits beyond Tuesday.

CBA and ANZ now expect the RBA to hike to 4.85% on November 3, its fifth rise of 2026 after hot inflation data, with Westpac reaffirming its call. Banks see rising risk of a further hike in February, though most expect a pause after next week. That conditional pause matters for the Australian dollar. A central bank that signals it is done, even temporarily, hands the currency less than one that leaves the door open aggressively.

The AUD Faces a Ceiling, Not Just a Floor

ING has raised its short-term AUD/USD target to 0.71, citing the best volatility-adjusted carry in G10, but sees no return to 0.72 this quarter as a hawkish Fed keeps the US dollar well supported. That framing is the key one for traders. The Australian dollar’s yield case is real. The obstacle is equally real.

The AUD/USD exchange rate stood at 0.7031 on October 30. Over the past 52 weeks, the pair ranged from roughly 0.64 to roughly 0.73. The Aussie has clawed back meaningful ground from its late-2025 lows, but the ceiling keeps reasserting itself near 0.72, where the year’s high was set in May.

The Fed is not sitting still. The Fed held its benchmark rate steady at 3.75% to 4.00% at its October meeting, but additional rate hikes may still lie ahead, potentially keeping borrowing costs and yields on short-term investments elevated. Investors have been expecting that the Fed will resume hiking at its December meeting. Fed funds futures traders have been pricing a December hike as more likely than not. Two central banks tightening in the same direction is not an environment where yield differentials drive dramatic currency moves. The spread stays compressed.

Where BHP and RIO Fit

For equity traders watching the Australian dollar, the mining sector provides the second lens. Iron ore futures in Singapore dropped below $90 per ton on October 15, reaching their lowest level in two years due to persistent worries over weak demand from China.

BHP and Rio Tinto are thus caught in the same cross-current as the currency: a higher cash rate that supports the Aussie on one side, and softening commodity prices that drag on earnings on the other. A stronger AUD also cuts into the USD-denominated revenues both companies repatriate. Higher rates are not uniformly good news for the miners that anchor the ASX.

BHP’s commodity exposure extends beyond iron ore. BHP’s Escondida mine in Chile faces fresh supply disruption risk at a moment when copper pricing is already sensitive to demand signals from China.

The Trade

AUD/USD between 0.70 and 0.71 is not a trend trade right now. It is a range defined by two hawkish central banks on opposing sides of the pair. The RBA’s fifth hike removes a downside catalyst but does not clear the Fed-driven ceiling. A break above 0.71 would require either a Fed signal that December is off the table, or an iron ore recovery that broadens Australia’s current-account case. Neither condition is in place today.

Watch Tuesday’s RBA statement language closely. If the board sharpens its February guidance in either direction, that is the variable that moves AUD/USD, not the hike itself.