RBA Deputy Governor Hauser made hawkish comments that helped the Australian Dollar, even as Australian bond yields fell. This suggests a gap between the AUD’s strength and what the rates market is pricing in.
Hauser said inflation is still “too high,” and the Board cannot let it stay that way for much longer. Even so, OIS pricing remained muted.
Rba Hawkishness Versus Market Pricing
OCBC raised its end-2026 AUD/USD forecast to 0.73 from 0.69. The bank also noted that OIS markets are pricing in about 20bp of total hikes by May and around 36bp by year-end.
The article also says it was produced using an AI tool and reviewed by an editor. It is attributed to the FXStreet Insights Team.
We are seeing hawkish comments from the Reserve Bank of Australia support the Aussie dollar. Deputy Governor Hauser’s warning that inflation is “too high” has been a key driver. As a result, we have extended our bullish view and now forecast AUD/USD at 0.73 by the end of 2026.
There is a clear disconnect between the currency market and the interest-rate market. While the AUD is rising, rate pricing shows investors are not convinced the RBA will deliver meaningful hikes. The rates market is pricing only about 36 basis points of hikes for the rest of the year.
Options Strategies For A Volatile Repricing
This caution from bond investors comes despite recent data showing inflation is still a concern. The latest quarterly CPI for Q4 2025 came in at a stubborn 3.8%, well above the RBA’s target band. In addition, January’s jobs report showed the unemployment rate steady at 4.1%, which gives the central bank room to act.
A similar setup appeared in late 2024, when the bond market was slow to accept the RBA’s commitment to its final hike. That episode suggests the currency market may be better at anticipating policy than the more cautious rates market. Recent strength in Chinese import data for key Australian commodities adds to that view.
For traders, this disconnect may create an opportunity in options. Buying AUD/USD call options offers exposure to further upside if the RBA follows through on its hawkish tone. It also limits risk if the rally fades.
The gap between the RBA’s messaging and market pricing also points to higher volatility ahead. Buying a straddle could work well, as it aims to profit from a large move in either direction. This directly targets the chance that the market resolves its disagreement sharply in the weeks ahead.
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