AUD/USD Forecast 2026: Inflation Shock Forces Goldman RBA Rethink

Market impact: Moderately bullish for AUD/USD, but dependent on confirmation.

The key market change is not the July headline CPI itself, but the combination of stronger underlying inflation and broader price pressure across services and consumer goods. That increases the probability that the RBA will keep policy restrictive or tighten again, raising the expected Australian–US rate differential in the Australian dollar’s favor. Goldman’s revised call for a 25 bp hike to 4.60% in November, alongside a stated risk of an earlier move, therefore provides a positive near-term catalyst for AUD/USD.

The initial rise in the implied probability of a September RBA hike—from 17% to 38%—shows that the release materially shifted rate expectations. However, the market’s subsequent pullback after the Jackson Hole speech highlights the pair’s two-sided exposure: stronger Australian yields support AUD, while a broad US-dollar rally can overwhelm domestic Australian fundamentals.

Short term:

The bias is AUD-positive if Australian front-end yields continue repricing higher and the US dollar consolidates. AUD/USD may remain sensitive to expectations for September versus November: a move toward pricing an earlier RBA hike would likely offer the strongest support, while stabilization around a November-only hike could limit further upside.

Medium term:

A second broad inflation surprise would make the RBA hike increasingly credible and could extend AUD support through higher carry demand. Conversely, a softer labour-market report or weaker August CPI could unwind the recent hawkish repricing, particularly if markets had already incorporated much of Goldman’s revised forecast.

Important counter-risk:

Higher inflation is not unambiguously positive for the currency. If traders interpret it as evidence of a sharper domestic slowdown, tighter financial conditions, or a greater probability of eventual policy-induced recession, the initial yield-supportive reaction could fade. AUD/USD also remains vulnerable to renewed US-dollar strength, higher US yields, or deterioration in global risk appetite.

What traders should monitor next:

Australian employment data, August CPI, RBA communication, Australian two- and three-year bond yields, and the US rate-dollar response to forthcoming US macroeconomic and Federal Reserve developments. The most durable bullish interpretation requires inflation persistence and resilient employment, rather than inflation alone.