Australia CPI Rises to 4.3% in September 2026: RBA Hike Odds and AUD/USD Outlook
Australian inflation picked up again in September. The Consumer Price Index (CPI) rose 4.3% in the 12 months to September 2026, according to the Australian Bureau of Statistics (ABS). Markets had expected 4.2%. The August reading was 4.0%. The data came out at 11:30 AEDT on 28 October, which was 00:30 in London.
The hotter print lifted market odds of a Reserve Bank of Australia (RBA) hike on 3 November to about 90%, according to ABC News live coverage. The Australian dollar rose to about 0.7050 to 0.7055 against the US dollar in the Asian session, according to Tradingpedia. The ASX 200 was up about 0.7% before the release and then closed flat, as reported by Yahoo Finance (AAP).
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
Table of Contents
- Australia CPI September 2026: The Main Answers
- What Is Australia CPI and Why Does It Matter?
- What Drove the September CPI Higher?
- Australia Core Inflation: What the Underlying Measures Show
- Australia Inflation Rate in 2026: Month by Month
- What Does the CPI Mean for the RBA Cash Rate?
- The Other Side of the Debate: A Softer Labour Market
- How Did Markets React?
- AUD/USD Analysis: Key Levels After the CPI
- The US Side of AUD/USD
- Brent Crude and Australian Inflation
- AUD/USD Forecast: What Some Analysts Expect
- Upside and Downside Drivers for the Aussie Dollar
- Possible Scenarios for the RBA and AUD/USD
- How Traders Often Approach AUD/USD Around Data Like This
- Economic Calendar November 2026: Dates to Watch
- Key Risks to the Outlook
- Frequently Asked Questions
- What was the Australia CPI for September 2026?
- What does Australia CPI mean for interest rates?
- When is the next RBA meeting?
- What is trimmed mean inflation?
- How does inflation affect the Australian dollar?
- Will inflation come down in Australia?
- When is the next Australia CPI release?
- Why did AUD/USD give back its gains?
- Final Thoughts
Australia CPI September 2026: The Main Answers
Here are the short answers first. The details follow below.
- Headline annual inflation rose to 4.3%, above the 4.2% consensus forecast.
- Monthly CPI rose 0.8% in original terms and 0.6% in seasonally adjusted terms.
- The monthly trimmed mean rose to 3.6% from a revised 3.5% in August.
- The quarterly trimmed mean rose 1.0% in the September quarter, above the RBA's 0.8% August projection.
- Housing was the largest contributor, rising 5.2% over the year.
- Automotive fuel jumped 9.4% in September alone on higher world oil prices.
- Market pricing for a 25 basis point hike to 4.85% on 3 November rose to about 90%.
Source: ABS, ABS media release, investingLive preview, Tradingpedia (consensus). Forecasts are consensus figures published before the release. Past performance is not a reliable indicator of future results.
When Was the Australia CPI Released?
The ABS publishes the monthly CPI at 11:30 Australian Eastern time. The September 2026 release landed on Wednesday 28 October. Clocks had changed in both Australia and the UK in October, so the table shows the times that applied on the day.
Source: ABS media release, release time 11:30am AEDT. Time zone conversions by Admirals.
What Is Australia CPI and Why Does It Matter?
The CPI measures the change in prices that Australian households pay for a basket of goods and services. The ABS now publishes a complete monthly CPI. Annual changes since April 2025 compare each month with the same month a year earlier.
The RBA targets inflation of 2% to 3%. When inflation sits above that band, the central bank may raise its cash rate. Higher rates tend to support a currency, all else equal. That link helps explain why AUD/USD often moves sharply in the minutes after the release.
Traders who want a refresher on how macro data feeds into prices can read the Admirals guide to forex fundamental analysis.
What Is Trimmed Mean Inflation?
The trimmed mean removes the items with the largest price rises and falls each period. It then averages what is left. The aim is to show the underlying trend without one-off shocks. The RBA watches this measure most closely.
In September, automotive fuel was excluded from the trimmed mean, according to the ABS. The ABS said this was a key driver of the difference between headline inflation (4.3%) and the trimmed mean (3.6%).
What Drove the September CPI Higher?
Two groups did most of the work. Housing added about 1.1 percentage points to annual inflation. Transport added about 1.0 point. Together they explain roughly half of the 4.3% headline rate.
ABS head of price statistics Rachael McCririck said that "Housing was the largest contributor to annual inflation in September". She spoke in the ABS media release.
Source: ABS, Consumer Price Index, Australia, September 2026. Original terms. Past performance is not a reliable indicator of future results.
Why Is Petrol So Expensive in Australia?
Automotive fuel prices rose 9.4% in September after a 14.8% jump in August, according to the ABS. The ABS linked the rise to higher world oil prices. Over 12 months, fuel prices were up 23.6%, as reported by Savings.com.au.
The backdrop is the conflict in the Middle East. The US Energy Information Administration (EIA) said Brent averaged about $114 a barrel in September. It touched $131 on 15 September after a pipeline disruption, according to Trend, which reported the EIA's October outlook.
Why Are Electricity Prices Rising?
Electricity prices rose 12.8% over the year. Savings.com.au linked this mainly to the gradual expiry of Commonwealth electricity bill rebates. New dwelling costs rose 4.7% as builders passed on higher costs for materials and labour, the ABS said.
Contribution to Annual Inflation by Group
Source: ABS, September 2026. Contributions may not sum exactly because of rounding. Past performance is not a reliable indicator of future results.
Australia Core Inflation: What the Underlying Measures Show
The underlying measures matter more for the RBA than the headline rate. Every annual rate in the table below was above the top of the RBA's 2% to 3% band. Services inflation was 4.1%. Non-tradables inflation, which reflects domestic price pressure, was 4.5%.
Source: ABS, September 2026. Trimmed mean and weighted median monthly changes are seasonally adjusted. Past performance is not a reliable indicator of future results.
Australia Q3 CPI and the Quarterly Trimmed Mean
The September release also carried the quarterly figures. CPI rose 1.3% in the September quarter. The quarterly trimmed mean rose 1.0%, the ABS said. In its August forecasts, the RBA had pencilled in about 0.8%, as noted in the investingLive CPI preview.
On an annual basis, the quarterly trimmed mean reached 3.7%, according to investingLive. Our earlier report on the Australia trimmed mean CPI for Q3 2026 covers that series in more depth.
Source: Aussie, investingLive. Forecasts are not a reliable indicator of future performance.
Australia Inflation Rate in 2026: Month by Month
Headline inflation has been volatile this year. It spiked to 4.6% in March when oil prices jumped. It then eased to 3.5% by July. August and September brought two straight rises. The trimmed mean has been steadier, drifting from 3.3% early in the year to about 3.6%.
Source: ABS, data as published on 28 October 2026 (August trimmed mean revised). Past performance is not a reliable indicator of future results.
Five Septembers of Australian Inflation
A longer view helps. Inflation peaked in 2022 and fell to below 3% by late 2024. It has climbed again since then.
Source: ABS. Figures before April 2025 compare the September quarter with the same quarter a year earlier. Past performance is not a reliable indicator of future results.
Inflation by Capital City
Inflation was highest in Hobart and lowest in Melbourne. Every capital city recorded inflation above the RBA's 2% to 3% target band.
Source: ABS. Past performance is not a reliable indicator of future results.
What Does the CPI Mean for the RBA Cash Rate?
The RBA cash rate stands at 4.60% after four hikes in 2026. The latest came on 29 September, when the Board voted 9-0. That level is the highest since November 2011, as covered in our report on the RBA Monetary Policy Statement.
Source: Admirals, Aussie. Past performance is not a reliable indicator of future results.
RBA Hike Odds After the CPI
Market pricing moved fast. Before the data, the odds of a November hike sat at around 60%, according to ABC News. Straight after the release, they rose to about 90%. A separate report cited Bloomberg data showing odds of about 85%, in the ABC News CPI report.
The shift built over several days. Deputy Governor Andrew Hauser said on 21 October that the inflation outlook looked "materially worse" than forecast, as reported by Aussie. The probability of a hike then rose from about 20% to nearly 50%, according to XTB.
Odds are market-implied, taken from the sources linked in each row, and change during the day. Past performance is not a reliable indicator of future results.
What Did Bullock Say After the Data?
Governor Michele Bullock spoke at Senate Estimates a few hours after the release. investingLive summarised her view as inflation being "far too high". She also said it was difficult to completely look through supply shocks, as reported by investingLive.
Bullock added that domestic demand was still higher than supply. She declined to give guidance on the 3 November decision. Our coverage of the Bullock speech at Senate Estimates has the full detail.
Earlier, Hauser had flagged that the quarterly trimmed mean looked set to come in above the RBA's forecast, according to investingLive. The data confirmed that warning.
With markets pricing about 90% odds of a hike, a 25 basis point move on 3 November may already be in the price of the Australian dollar. The RBA's message about what comes next could matter more for AUD/USD than the hike itself.
What Are the Big Banks Expecting?
Before the data, the big four banks were evenly split, according to Aussie. Two expected a hike in November. The other two expected a hold. After the release, CBA and NAB both switched to a hike call, according to Savings.com.au.
After the release, CBA's Belinda Allen described a November move as an "insurance hike", according to ABC News. ANZ's Adam Boyton and Madeline Dunk said the upside risks were materialising. Westpac's Luci Ellis reaffirmed her call for a November hike.
Source: ABC News, Aussie, Savings.com.au. Forecasts are not a reliable indicator of future performance.
How the Data Compare With the RBA's August Forecasts
The RBA's August Statement on Monetary Policy saw headline inflation at 3.6% by December 2026. It saw the trimmed mean at 3.3%. The trimmed mean was forecast to ease to 2.9% by June 2027, with headline inflation at 2.8%, according to RealEstateCalc, which summarised the RBA tables. The 3 November Statement could revise these figures higher.
Source: RealEstateCalc, based on the RBA August 2026 Statement on Monetary Policy. Both measures are forecast at 2.4% in June 2028, as shown in the source. The June quarter 2026 column shows actual data, and past performance is not a reliable indicator of future results. Forecasts are not a reliable indicator of future performance.
The Other Side of the Debate: A Softer Labour Market
The case for a hike has a clear counterweight. The unemployment rate rose to 4.7% in September. Employment fell by 39,000 and the participation rate dropped to 66.8%, according to the ABS.
The ABS also noted that trend unemployment held at 4.6%. It flagged that survey changes may have affected the seasonally adjusted figures. A weak October jobs report could revive talk of a pause after November.
How Did Markets React?
The first reaction was sharp. AUD/USD climbed to about 0.7050 to 0.7055 in the Asian session, its highest level since 23 September, according to Tradingpedia. It then gave back most of the move and traded near 0.7031 around the ASX close, as reported by Yahoo Finance (AAP). All market levels in this article are as at 28 October 2026 and may have changed since.
Source: Tradingpedia, Yahoo Finance (AAP), ABC News. Past performance is not a reliable indicator of future results.
ASX 200: Why Shares Gave Up Their Gains
Higher rate expectations can weigh on equity valuations. The ASX 200 was up about 0.7% before the release, according to Yahoo Finance (AAP). It then slowed to a halt and closed flat at 8,847, according to ABC News. Betashares chief economist David Bassanese called a Melbourne Cup hike an odds-on favourite, as reported by Yahoo Finance.
A one-day move says little about the longer trend. The ASX 200 rose in four of the five full calendar years from 2021 to 2025. It fell about 5.5% in 2022.
Source: Yahoo Finance, S&P/ASX 200 monthly history, December closes. The 2026 level is the 28 October close reported by Yahoo Finance (AAP). Changes calculated by Admirals from index levels, before dividends, taxes and trading costs, which may vary. Past performance is not a reliable indicator of future results.
Index traders can follow the Australian market through CFDs on indices, which include a CFD on the ASX 200.
AUD/USD Analysis: Key Levels After the CPI
The pair has recovered from its mid-October low. A double bottom was confirmed when price closed above the pattern's neckline, according to DailyForex. DailyForex also noted that the 50 moving average had crossed above the 200 moving average, a pattern known as a golden cross.
Tradingpedia noted that price stayed below the 50% Fibonacci retracement at 0.7066. It described the broader bias as neutral to slightly negative. The two technical readings therefore point in different directions.
Source: Tradingpedia (28 October), DailyForex (27 October), Pound Sterling Live (2026 high). Past performance is not a reliable indicator of future results.
AUD/USD Over Five Years
AUD/USD has traded in a wide range over five years. It fell in four of the five full calendar years from 2021 to 2025. The exception was 2025, when it gained about 7.8%. In 2026 it is up about 5.4% from the 2025 close, based on the level near 0.7031 on 28 October.
Source: Pound Sterling Live daily history for 2020, 2021, 2022, 2023, 2024, 2025, 2026. Changes calculated by Admirals from year-end closes. The 2020 base uses the 30 December close because the source's 31 December 2020 row is inconsistent. The 2026 level is the rate at the ASX close reported by Yahoo Finance (AAP). Changes show the exchange rate only, before taxes and trading costs, which may vary. Past performance is not a reliable indicator of future results.
The US Side of AUD/USD
AUD/USD has two central banks behind it. The Federal Reserve raised its target range by 25 basis points to 3.75% to 4.00% on 16 September, according to the Federal Reserve. The October FOMC meeting was scheduled for 27 and 28 October, according to the Fed meeting calendar.
Source: Admirals, Federal Reserve. The hike scenario is illustrative. Forecasts are not a reliable indicator of future performance.
A wider rate gap has often supported the Australian dollar. A hawkish Fed could offset that support. A stronger US dollar after strong US data could have the same effect.
Brent Crude and Australian Inflation
Fuel is the most direct channel from the Middle East to Australian prices. In its October outlook, the EIA forecast Brent at $105 in the fourth quarter of 2026. It then saw Brent easing to $87 in the second quarter of 2027, as reported by Trend.
Source: Trend, citing the EIA Short-Term Energy Outlook of October 2026. Forecasts are not a reliable indicator of future performance. Past performance is not a reliable indicator of future results.
Brent has swung widely over the past five years. It rose about 51% in 2021 and then fell for three straight years from 2023 to 2025.
Source: US EIA, Europe Brent spot price FOB, daily, last trading day of each year. Spot prices can differ from the futures prices quoted elsewhere in this article. Changes calculated by Admirals, before taxes and trading costs, which may vary. Past performance is not a reliable indicator of future results.
If the EIA forecasts prove right, fuel could pull headline inflation lower in 2027. If oil prices stay high, the RBA may face more pressure. Traders following energy can look at CFDs on commodities, including oil.
AUD/USD Forecast: What Some Analysts Expect
Bank forecasts for the pair differ. CBA raised its forecasts in early October, but it still expects the Australian dollar to ease against the US dollar into 2027, according to Pound Sterling Live. Its indicative range for the end of December runs from 0.65 to 0.71. Westpac had a higher three-month forecast of 0.72, according to the same report.
Source: Pound Sterling Live, 7 October 2026. Forecasts are not a reliable indicator of future performance.
CBA's forecasts sit below the current spot level. Westpac's three-month forecast sits above it. Bank views on the pair therefore differ widely.
Upside and Downside Drivers for the Aussie Dollar
The table sets out the main forces on each side.
Admirals analysis based on the sources cited in this article. This is an illustrative summary of factors.
Possible Scenarios for the RBA and AUD/USD
The scenarios below are illustrative. They draw on the levels and views cited above. They do not predict what will happen.
Scenario 1: A Hike With a Balanced Message
The RBA raises the cash rate to 4.85% and says future moves depend on the data. With most of the move priced, AUD/USD may test the 0.7065 to 0.7106 zone. A move above it could be harder to sustain without further hawkish signals.
Scenario 2: A Hike With a Tightening Bias
The RBA hikes and signals that more may follow. Its new forecasts could show inflation staying well above target. In that case AUD/USD could revisit the 2026 high near 0.7277. A hawkish Fed could still limit gains.
Scenario 3: A Surprise Hold
The RBA keeps the rate at 4.60% and points to rising unemployment. With about 90% priced for a hike, this would be the largest surprise. AUD/USD could fall back below 0.7000 and test the 200 moving average near 0.6990.
Admirals illustrative scenarios based on the levels cited above. Forecasts are not a reliable indicator of future performance.
How Traders Often Approach AUD/USD Around Data Like This
Event days can bring fast price swings and wider spreads. The points below describe how traders often prepare. They are general observations.
- Many traders check the economic calendar for exact release times before an event.
- Some compare the actual figure with the consensus forecast in the first seconds after the release.
- Traders often watch the trimmed mean as closely as the headline rate.
- Some wait for the first spike to fade before they assess the trend.
- Many size positions so that a sudden gap does not exceed their risk limits.
- Stop-loss orders can help manage risk, although they may not protect against slippage in fast markets.
Admirals offers CFDs on Forex, including AUD/USD, on the MetaTrader 5 platform. A demo account uses virtual funds, so traders can practise without real money. Results on a demo account may differ from live trading.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
For more on position sizing and stops, see the Admirals guide to forex risk management. The guide to CFD trading explains how leverage works.
Economic Calendar November 2026: Dates to Watch
Several releases could shape the next move in the pair. Times below are in Sydney time and London time.
Source: Federal Reserve, Aussie, ABS economy release calendar, ABS labour release calendar. Dates can change, so check the latest calendar.
Key Risks to the Outlook
The main risks to the outlook include the following.
- A sharp fall in oil prices could pull headline inflation down quickly.
- Further rises in unemployment could weaken the case for more hikes.
- High market pricing leaves room for disappointment if the RBA sounds cautious.
- A stronger US dollar could offset support from Australian rates.
- Monthly CPI data can be revised, as the August trimmed mean was.
Frequently Asked Questions
What was the Australia CPI for September 2026?
Annual CPI rose 4.3% in September 2026. That was above the 4.2% forecast and the 4.0% August reading.
What does Australia CPI mean for interest rates?
Inflation above the RBA's 2% to 3% target raises the chance of higher rates, as markets priced after this release.
When is the next RBA meeting?
The RBA announces its next decision on 3 November 2026 at 14:30 Sydney time, with new forecasts.
What is trimmed mean inflation?
It removes the largest price rises and falls each period, then averages the rest to show underlying inflation trends.
How does inflation affect the Australian dollar?
Higher inflation can lift rate expectations, which has often supported the Australian dollar, although other factors also matter.
Will inflation come down in Australia?
The RBA's August forecasts saw inflation easing below 3% by mid-2027, but energy prices make the path uncertain.
When is the next Australia CPI release?
The ABS plans to publish the October 2026 CPI on Wednesday 25 November at 11:30 Sydney time.
Why did AUD/USD give back its gains?
Possible reasons include hike pricing that was already elevated and a US Federal Reserve decision that was still pending.
Final Thoughts
The September CPI confirmed that inflation in Australia is running well above the RBA's 2% to 3% band. Fuel and housing drove the headline rate. The underlying measures also firmed. Market pricing on 28 October put the odds of a November hike at about 90%. Rising unemployment remains the main argument for a pause. For AUD/USD, the RBA's guidance may matter as much as the hike itself. The Fed remains the other key driver.
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