While the market prices Fed cuts, Auld argues the Reserve Bank of Australia (RBA) is "not done yet" and predicts they will hike rates again in May 2026 because "inflation [is] sticking at that higher end." Monetary policy divergence. If the US holds or cuts rates while Australia hikes, the yield differential widens in favor of the Aussie Dollar (AUD). LONG AUD vs. USD. A global hard landing crashing commodity prices (which AUD is sensitive to).