RBA Keeps Rates Steady at 3.60% as Inflation Pressures Persist and Labor Market Stays Tight

The Reserve Bank of Australia (RBA) opted to hold its benchmark interest rate at 3.60% in its latest policy decision, signaling a cautious but deliberate approach as the central bank navigates a complex mix of rising inflation and a still-tight labor market.

The decision was widely expected by markets, but it carries significant implications for forex and CFD traders — especially those watching the Australian dollar (AUD) and its cross-currency dynamics in the months ahead.

Policy Pause Amid Mixed Economic Signals

Australia’s inflation story is far from over. While headline price growth has cooled from its peak, the pace of decline has slowed, with August CPI rising 3.0% year-over-year, slightly above expectations. That uptick reinforces the view that inflationary pressures remain persistent, and the RBA is not yet ready to shift toward a rate-cutting cycle.

Governor Michele Bullock emphasized the bank’s commitment to returning inflation to its 2–3% target range while preserving economic stability. She noted that future decisions will remain data-dependent, with particular emphasis on the upcoming Q3 inflation report due in late October, which could set the tone for policy into 2026.

Labor Market Tightness Keeps the RBA on Guard

The other piece of the puzzle is Australia’s labor market. Unemployment remains near historically low levels, and although there are signs of moderation, conditions are still tight enough to risk wage-driven inflation if policy is loosened too soon.

This backdrop is prompting the RBA to hold steady — balancing the need to control inflation without stifling economic growth. The central bank made it clear that while monetary policy is currently restrictive enough to guide inflation lower, it’s too early to declare victory.

Market Reaction and AUD Outlook

The Australian dollar held firm following the decision, with AUD/USD hovering around the 0.6600 level as traders digested the central bank’s tone. Markets have now scaled back expectations for a near-term rate cut, with most participants eyeing early 2026 as a more likely timeline unless incoming data accelerates the disinflation process.

For traders, the message is clear: the RBA is in wait-and-see mode, and volatility in AUD pairs will likely hinge on inflation releases, employment data, and shifts in global risk sentiment.

What This Means for Forex & CFD Traders

This decision reinforces a broader theme across global central banks: monetary policy is entering a “pause and observe” phase. For traders, that means paying attention to macroeconomic data surprises and central bank communication is more important than ever.

Here’s what to watch next:

• 📅 Q3 CPI report (late October): A key determinant for the RBA’s policy path. A hotter-than-expected print could reignite tightening expectations.
• 🧭 Wage growth and jobs data: Persistent strength could prolong the RBA’s cautious stance.
• 💹 Global monetary shifts: Divergence between the Fed, ECB, and RBA could create trading opportunities in AUD/USD, AUD/JPY, and cross pairs.
• 📊 China’s economic outlook: As a major trade partner, shifts in China’s growth trajectory often ripple through the AUD.

Bottom Line: Stability Before the Next Move

The RBA’s decision to hold rates at 3.60% underscores its cautious stance amid sticky inflation and a resilient labor market. With economic signals still mixed, policymakers are choosing patience — waiting for clearer evidence before committing to their next move.

For forex and CFD traders, this is a reminder that central bank policy shifts are often shaped by the smallest data surprises. Staying alert to upcoming inflation releases and labor market trends will be key to anticipating the next wave of AUD volatility.

⚠️ Risk Disclaimer: Trading leveraged products such as CFDs involves a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. Always conduct your own research and consider seeking independent advice before making trading decisions.

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