The AUD/NOK currency pair lost ground on Monday, snapping a two-day string of gains, ahead of the outcome of the Reserve Bank of Australia’s policy meeting.
The Reserve Bank of Australia is expected to raise its cash rate by 25 basis points to 4.35% at its May 5th meeting. It would be the RBA’s third consecutive 25 bps rate hike this year.
The RBA had underscored that inflation was still expected to stay above target for an extended period and that the balance of risks shifted further toward the upside, including for inflation expectations.
The latest data by the Australian Bureau of Statistics showed that annual consumer price inflation in Australia had picked up to 4.6% in March from 3.7% in February. The move was largely attributed to a fuel shock linked to the Middle East conflict.
On a monthly basis, the CPI rose 1.1% in March, compared with 0% in the prior month.
Elevated inflation along with a tight labor market and stronger-than-expected growth in late 2025 have underpinned expectations that the RBA may tighten policy further.
Meanwhile, Norges Bank has adopted a more restrictive stance after the war in the Middle East led to higher energy prices and increased inflation risks.
While the policy rate is still set at 4%, the central bank’s forward guidance and updated interest rate path now indicate a rate hike in June, with the potential for further adjustments later in 2026.
The AUD/NOK currency pair was last down 0.77% on the day to trade at 6.6464.
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