Report published September 25, 2026
RBA Preview: A Decisive Hike to Keep Inflation in Check – ING FX Strategy
ING · September 25, 2026
ING expects the RBA to deliver a hawkish 25bp rate hike to 4.6% on 29 September, driven by persistent core inflation, tight labour markets, and elevated imported fuel prices. This policy move should support an undervalued AUD, with ING revising its year-end AUD/USD target to 0.72.
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Finvaulta summarizes ING's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.ING expects the Reserve Bank of Australia (RBA) to raise the cash rate by 25bp to 4.6% on 29 September 2026 due to sticky core inflation, strong labour demand, and higher imported energy costs.
- 2.Upside inflation risks have been amplified by imported oil and fuel disruptions following the US-Iran conflict escalation, alongside trimmed mean inflation holding high at 3.6% YoY in August.
- 3.AUD/USD appears oversold and undervalued beyond a 1.5 standard deviation band; ING revises its year-end AUD/USD forecast from 0.73 to 0.72, seeing RBA tightening helping prevent a return to June lows.
Table of Contents
- The RBA is set to lean hawkish
- Core inflation is turning out to be stickier
- What has strengthened the case for a hike
- Labour market remains resilient
- RBA to help AUD weather turmoil
- AUD/USD decline looks overdone
Report data
AUD/USD decline looks overdone
| Metric | Estimate | Context |
|---|---|---|
| RBA Cash Rate Forecast | 4.6% | Forecast cash rate following expected RBA hike on 29 September |
| Trimmed Mean Inflation (YoY) | 3.6% | Trimmed mean inflation likely holding at 3.6% YoY for a third consecutive month |
| Unemployment Rate | 4.6% | Australian unemployment rate |
| Labour Force Participation Rate | 67.1% | Record high participation rate showing robust labour supply |
| Three-Month Average Job Creation | 34000.0 jobs | Strongest pace of job creation since February |
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