Why Euro (EUR) fell 0.52%
Euro (EUR) fell 0.52% on September 29, 2026 — RBA hike to 4.6% lifts AUD, pressures euro.
What happened
The euro fell 0.5% as the RBA hiked 25 basis points to 4.60%, the highest rate since 2011—lifting AUD yields and supporting Australian dollar strength against the euro.
Why it moved
A higher RBA rate increases the yield spread in favor of AUD carry, attracting funding rotations out of lower-yielding currencies like EUR; EUR/AUD weakness is a direct mechanical result of the rate differential…
Why it matters
Within the Dollar Regime framework, central bank divergence is the primary driver of FX moves; the RBA's hawkish surprise shifts relative policy expectations and reinforces the broader Dollar (and commodity-currency)…
What would break the thesis
If the RBA's forward guidance turns dovish or markets had fully priced the hike beforehand, the immediate move could fade; ECB rate expectations would also need to remain soft for EUR weakness to persist.