Australian Dollar Pares Advance on Hauser Caution

File image Andrew Hauser. Source & credits: RBA, Pound Sterling Live.

The Australian dollar is softer across the board as rate hike bets recede.

Speculation of an early rate rise comes off the boil in Australia after the Reserve Bank of Australia's (RBA) Deputy Governor indicated there was no rush to hike.

Andrew Hauser said in an interview Thursday that Australians have probably seen the final rate cut of the current easing cycle as he described inflation of above 3% as "too high."

However, the RBA would prefer a patient approach to tackling renewed inflationary pressures ahead of the Reserve Bank’s Feb. 2-3 policy meeting.

"The comments by RBA member Hauser dragged yields lower by up to 9bp across the curve, adding to the relief triggered by CPI," says Société Générale.

GBP/AUD rose a third of a per cent to 2.0077 in the wake of the events, cementing support above the big 2.0 level. AUD/USD, which spiked to multi-month highs at 0.6760 on Wednesday retreats to 0.6695.

Currencies tend to find support when their central bank is entering a rate hiking cycle, which had become increasingly expected of the RBA through the latter plays of 2025. This is because a higher base rate raises short-term interest rate yields.

Global investors chase higher or rising yields as they seek returns. Therefore, the setback to the 'bullish' case for Aussie yields relative to elsewhere weighs on AUD.

Hauser said that the central bank is "trying to target inflation in a year or two years' time."

The intervention follows the release of Australia's November inflation data, which showed CPI inflation printed 3.4% y/y, below expectations for 3.7% and down on October's 3.8%.

The downside surprise underscores why the RBA won't be rushed into raising interest rates.

With AUD a firm favourite amongst investment bank strategists in 2026, these recent developments in interest rate expectations mean a longer wait for any outright outperformance.