{"id":97704,"date":"2023-11-27T06:47:06","date_gmt":"2023-11-27T06:47:06","guid":{"rendered":"https:\/\/arielle.com.au\/?p=97704"},"modified":"2025-12-09T02:06:07","modified_gmt":"2025-12-09T02:06:07","slug":"australian-dollar-forecast","status":"publish","type":"post","link":"https:\/\/arielle.com.au\/australian-dollar-forecast\/","title":{"rendered":"AUD To USD Forecast: Will The Aussie Hit US$0.70 In 2026?"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 11<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>\n<p>Relative to the US dollar, the Australian dollar dropped close to five-year lows at the start of 2025. It\u2019s been on a turbulent path since then:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>The AUD\/USD<\/strong> slid to around 61.5c in January.<\/li><li><strong>In February<\/strong>, it hit a high of 64c.<\/li><li><strong>It plummeted<\/strong> to below 60c in April.<\/li><li><strong>On 26th May<\/strong>, it lifted to over 65c.<\/li><li><strong>It peaked<\/strong> at around 67c in September.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>If you were trying to \u201cbuy the dip\u201d or time a breakout, you got hammered with a brutal sequence of false starts, sudden reversals, and emotional traps.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>Much of the chaos came from the U.S. side of the equation.<\/span><\/div><\/div>\n\n\n\n<p>Trump&#8217;s tariff shocks and the Federal Reserve\u2019s pivot toward rate cuts knocked the USD down nearly 11% in the first half of 2025.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<!-- TradingView Widget BEGIN -->\n<div class=\"tradingview-widget-container\">\n  <div class=\"tradingview-widget-container__widget\"><\/div>\n  \n  <script type=\"text\/javascript\" src=\"https:\/\/s3.tradingview.com\/external-embedding\/embed-widget-advanced-chart.js\" async>\n  {\n  \"width\": \"100%\",\n  \"height\": \"400\",\n  \"symbol\": \"SAXO:AUDUSD\",\n  \"timezone\": \"Australia\/Sydney\",  \n  \"theme\": \"light\",\n  \"style\": \"3\",\n  \"locale\": \"en\",\n  \"hide_top_toolbar\": true,\n  \"range\": \"60M\",\n  \"allow_symbol_change\": false,\n  \"hide_legend\": true,\n  \"save_image\": false,\n  \"calendar\": false,\n  \"hide_volume\": true,\n  \"support_host\": \"https:\/\/www.tradingview.com\"\n}\n  <\/script>\n<\/div>\n<!-- TradingView Widget END -->\n\n\n\n<p><em>Tip: Zoom out for better historical context of AUD\/USD performance.<\/em><\/p>\n\n\n\n<p>Yet the Aussie climbed despite suffering three interest-rate cuts at home. The unusual divergence left traders questioning whether the rally was built on solid ground.<\/p>\n\n\n\n<p>Or thin air.<\/p>\n\n\n\n<p>But the big question remains-<\/p>\n\n\n\n<p>Is the Aussie primed for a breakout &#8211; or is it about to forfeit all gains it clawed back this year?<\/p>\n\n\n\n<p>Let\u2019s explore the forces that will decide whether the $0.70 dream is realistic.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><thead><tr><th class=\"has-text-align-left\" data-align=\"left\">Key Takeaways:<\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>After a soft start to 2025<\/strong>, the AUD has strengthened modestly against the USD over the year.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>Depreciation<\/strong>&nbsp;risks include doubts over Chinese growth and the impact of Trump policies and fiscal spending in the US.<\/td><\/tr><tr><td class=\"has-text-align-left\" data-align=\"left\"><strong>RBA\u2019s<\/strong>&nbsp;rate differential with the US Fed \u2013 which has further easing pencilled in \u2013 may support the AUD\u2019s continued appreciation.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Will The AUD Break Out In 2026?<\/strong><\/h2>\n\n\n\n<p>The AUD\/USD was trading at around $US0.645 at the time of writing. It traded at an average of around 65 US cents between June and December 2025.\u00a0<\/p>\n\n\n\n<p>The Aussie experienced periods of strength against the greenback in late 2025 on the back of:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Weakness<\/strong> in the US dollar due to economic uncertainty, political volatility, weakening jobs data, inflation worries, and delayed policy rate easing.\u00a0<\/li><li><strong>Lower expectations<\/strong> of any additional cash rate cuts by the Reserve Bank of Australia (RBA), after high CPI prints in September and October and steady unemployment numbers.<\/li><li><strong>Solid commodity<\/strong> prices, with iron ore\u2019s value holding around the US$100 a tonne mark, and booming Chinese stock markets, with the Hang Seng Index up 30% over the year.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>The Aussie hit a 10-month high of around 67 US cents, coinciding with the US Federal Reserve\u2019s September meeting, which heralded the US\u2019 first interest rate cut of 2025.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/will-australia-go-into-recession\/\">Will Australia Slip Into A Recession In 2026?<\/a>)<\/strong><\/p>\n\n\n\n<p>The general outlook is for the AUD\/USD exchange rate to close out 2025 higher, with a continued strengthening of the Aussie dollar into the first half of 2026.<\/p>\n\n\n\n<p>But further twists and turns from a Trump-led US economy are likely.<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Key downside risks<\/strong>\u00a0for the USD include further uncertainty related to tariffs, cuts from the Fed, recession and debt load risks, and growing de-dollarisation across Europe and other nations.<\/li><li><strong>Factors to watch<\/strong>\u00a0related to AUD depreciation include worsening global growth (and especially China), or a sharp slowdown in demand or spike in the jobless rate that could prompt a dovish tilt from the RBA.<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6-Month Forecast For AUD\/USD.<\/strong><\/h3>\n\n\n\n<p>Major banks are forecasting a gradual increase in the Australian dollar exchange rate over the six months to June 2026:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Westpac\u2019s<\/strong>\u00a0<a href=\"https:\/\/library.westpaciq.com.au\/content\/dam\/public\/westpaciq\/secure\/economics\/documents\/aus\/2025\/11\/WestpacWeekly20251124.pdf\">economic report<\/a>\u00a0issued the week of 24th November, 2025, predicted the AUD would be worth US$0.66 by December 2025\u00a0and US$0.69 by March 2026.<\/li><li><strong>NAB\u2019s<\/strong>\u00a0<a href=\"https:\/\/www.nab.com.au\/business\/international-and-foreign-exchange\/financial-markets\/exchange-rate-forecast\">FX forecast<\/a>\u00a0as of November was that the AUD\/USD exchange rate would reach 0.67c by December 2025 and rise to 0.71c by June 2026.<\/li><li><strong>ING<\/strong>\u00a0is forecasting the exchange rate will be at US$0.66 in Q4 2025 and rise to US$0.68 by Q2 of 2026.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>The latest Consumer Price Index (<a href=\"https:\/\/www.abs.gov.au\/statistics\/economy\/price-indexes-and-inflation\/consumer-price-index-australia\/latest-release\">CPI<\/a>) from October 2025 shows core inflation is now at 3.3% in Australia. <\/p>\n\n\n\n<p>That follows a higher-than-expected CPI result for the September quarter.<\/p>\n\n\n\n<p>The resurgence in price growth puts inflation well out of target range. It could mean monetary policy easing from our central bank is over.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>RBA Governor Michele Bullock said in November it was \u201cpossible that there are no more rate cuts.\u201d<\/span><\/div><\/div>\n\n\n\n<p>In contrast, the US Fed has only recently started its easing cycle. The Fed:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Held<\/strong> rates steady at 4.25%-4.5% between December 2024 and September 2025, amid uncertainty over tariff impacts (and despite pressure from Trump).<\/li><li><strong>Cut<\/strong> its policy rate by 0.25% in September 2025, and a further 25 basis points in October, bringing the rate to 3.75%-4.0%. It next meets on 9th-10th December.<\/li><\/ul><\/div><\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/aud-usd-forecast-1024x791.jpg\" alt=\"\" class=\"wp-image-120650\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/aud-usd-forecast-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/aud-usd-forecast-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/aud-usd-forecast-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/aud-usd-forecast.jpg 1500w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><em>Above: The probability of a rate move by the Fed in December is high based on interest rate futures trading. <\/em>&nbsp;<\/p>\n\n\n\n<p>With division among the Fed\u2019s committee members, there are mixed views about the chances of a December cut. <\/p>\n\n\n\n<p>But markets were pricing in an 80% chance of a cut as of November 2025.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Did You Know?<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Higher interest rates typically attract investors.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>Despite three 0.25% rate cuts in February, May and August \u2013 bringing our cash rate to 3.60% \u2013 the AUD has been more attractive than the USD.<\/p>\n\n\n\n<p>Commbank economists suggested in a research note <a href=\"https:\/\/www.commbank.com.au\/articles\/newsroom\/2025\/09\/australian-dollar-comeback.html\">published<\/a> in September 2025 that the AUD would move higher against the USD as the American currency bottoms out in early 2026.<\/p>\n\n\n\n<p>But it won\u2019t last.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>\u00a0\u201cWe expect the recovery to fade as the US economy regains momentum and Chinese growth remains subdued,\u201d\u00a0said Joseph Capurso, CBA Head of Foreign Exchange<\/span><\/div><\/div>\n\n\n\n<p>The greenback\u2019s rebound will be aided by tax cuts, interest rate cuts, investment from overseas, and the fading impact of tariffs, according to Commbank. <\/p>\n\n\n\n<p>Downsides for the AUD include an expected drag on Australian commodity prices.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/usd-to-aud-exchange-rate-1024x791.jpg\" alt=\"\" class=\"wp-image-120651\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/usd-to-aud-exchange-rate-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/usd-to-aud-exchange-rate-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/usd-to-aud-exchange-rate-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/usd-to-aud-exchange-rate.jpg 1500w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><em>Above: USD gains were lost amid tariff chaos, as shown by a steep decline in the US Dollar Index, which tracks the greenback\u2019s price against 6 foreign currencies.<\/em><a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<p>A G10 FX Outlook 2026 report <a href=\"https:\/\/think.ing.com\/articles\/g10-fx-outlook-2026\/\">released<\/a> by ING on 10th November argues the Australian dollar should outperform.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/best-crypto-exchange-australia\/\">Best Cryptocurrency Exchanges In Australia<\/a>.)<\/strong><\/p>\n\n\n\n<p>ING foresees \u201crespectable\u201d growth prospects for China and perhaps just one 0.25% cut from the RBA in Q1 2026.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em>\u201cBased on our key view that markets will increasingly scrutinise a broader range of currency fundamentals in the new year, we think AUD is well-positioned.\u201d \u2014 ING<\/em><\/span><\/div><\/div>\n\n\n\n<p>But if or when uncertainty or US-China tensions spike again, the Aussie could reverse its gains.<\/p>\n\n\n\n<p>The AUD\/USD exchange rate dived to 59.15c in early April 2025 based on heightened fears on the eve of Trump\u2019s Liberation Day tariffs being implemented.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/aud-to-euro-forecast\/\">AUD To Euro Forecast: More Surprises Ahead?<\/a>)<\/strong><\/p>\n\n\n\n<p>NAB Senior FX Strategist, Rodrigo Catril, said the AUD\u2019s depreciation on Friday, 4th April, was \u201cthe seventh-biggest drop in the Aussie\u201d since it became a floating currency.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em>\u201cThe Aussie is always going to be susceptible to a bigger hit when there\u2019s uncertainty,\u201d Catril said at the time.<\/em><\/span><\/div><\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/AUD-USD-cash-rate-1024x791.jpg\" alt=\"\" class=\"wp-image-118080\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/AUD-USD-cash-rate-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/AUD-USD-cash-rate-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/AUD-USD-cash-rate-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/AUD-USD-cash-rate.jpg 1500w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><em>Above: Historical snapshot of bilateral and Trade-Weighted Index (TWI) AUD\/USD exchange rates. Note that the TWI is more stable<\/em>.<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>12-Month Forecast For AUD\/USD.<\/strong><\/h3>\n\n\n\n<p>Looking further ahead, some bankers expect the Australian dollar to appreciate further against the US dollar:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Westpac<\/strong>\u00a0predicts\u00a0that the Aussie\u2019s value will rise to US$0.70c by September 2026 and 71c by December.<\/li><li><strong>NAB<\/strong>\u00a0puts the AUD\/USD higher at 0.72c by the third quarter of 2026, declining to 71c by the end of 2026.<\/li><li><strong>ING\u00a0<\/strong>thinks the Australian dollar will remain steady at \u00a0US$0.68 in Q3 2026 and reach 69c by year-end 2026.<\/li><\/ul><\/div><\/div>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/cost-of-living-in-australia\/\">Why Is Living In Australia So Expensive?<\/a>)<\/strong><\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Is The AUD\/USD Exchange Rate Measured?<\/strong><\/h2>\n\n\n\n<p>The RBA explains three key ways to measure an exchange rate:<\/p>\n\n\n\n<div style=\"height:23px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><tbody><tr><td><strong>Bilateral exchange rate<\/strong><\/td><td>The most common method, represented by currency pairs that quote one currency\u2019s value relative to another ( e.g., AUD\/USD).<\/td><\/tr><tr><td><strong>Cross rate<\/strong><\/td><td>A rate calculated by reference to a third currency. For instance, determining the EUR\/AUD by multiplying EUR\/USD by AUD\/USD.<\/td><\/tr><tr><td><strong>Trade-weighted index (TWI)<\/strong><\/td><td>Offers a broader yardstick of trends in a currency\u2019s value, by comparing it against the weighted average value of a \u2018basket\u2019 of currencies from trading partners (weighted based on the share of trade with those countries).<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The AUD Signals Most People Miss.<\/strong><\/h2>\n\n\n\n<p>Throughout 2026, drivers of price movements for the Australian Dollar will include:<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Domestic Economic Conditions.<\/strong><\/h3>\n\n\n\n<p>In particular, investors monitor:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Interest<\/strong> rates.<\/li><li><strong>Inflation<\/strong> (CPI).<\/li><li><strong>Consumer<\/strong> spending data.<\/li><li><strong>Labour<\/strong>\u00a0market figures (recent\u00a0<a href=\"https:\/\/www.crikey.com.au\/2024\/05\/16\/wages-growth-reserve-bank-australian-financial-review\/\">wage growth<\/a>\u00a0has not been on par with inflation).<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<iframe title=\"Inflation Rate Jumps To 4%.\" aria-label=\"Interactive line chart\" id=\"datawrapper-chart-571Lh\" src=\"https:\/\/datawrapper.dwcdn.net\/571Lh\/3\/\" scrolling=\"no\" frameborder=\"0\" style=\"width: 0; min-width: 100% !important; border: none;\" height=\"419\" data-external=\"1\"><\/iframe><script type=\"text\/javascript\">!function(){\"use strict\";window.addEventListener(\"message\",(function(a){if(void 0!==a.data[\"datawrapper-height\"]){var e=document.querySelectorAll(\"iframe\");for(var t in a.data[\"datawrapper-height\"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data[\"datawrapper-height\"][t]+\"px\";e[r].style.height=i}}}))}();\n<\/script>\n\n\n\n<p><em>Above: The latest economic data makes additional interest rate cuts in 2026 doubtful, and has put hikes back into contention<\/em>.<a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<p>Interest rates, inflation and unemployment are particularly important, because:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>When interest rates rise, <\/strong>our currency delivers a higher return than other major currencies, increasing demand for AUD and its value.<\/li><li><strong>When purchasing power is reduced\u00a0<\/strong>(i.e. when you get less \u2018bang\u2019 for your Aussie dollar compared to a US dollar), the AUD\u2019s value will likely decline.<\/li><li><strong>Low unemployment<\/strong> suggests a robust economy and strengthens the currency.\u00a0<\/li><\/ul><\/div><\/div>\n\n\n\n<p>In its November Outlook, the RBA stated the economy had been more resilient in the face of global trade conflicts than expected.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/best-share-trading-platform-australia\/\">Best Share Trading Platforms In Australia<\/a>).<\/strong><\/p>\n\n\n\n<p>But domestic demand has seen inflation flare up again.<\/p>\n\n\n\n<p>Commbank Chief Economist, Luke Yeaman, said in a note released 25th November 2025 that recent data had, in fact, raised the risk of interest rate <em>hikes<\/em> in 2026.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Did You Know?<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">The AUD\/USD currency pair often rises and falls along with the price of gold (<a href=\"https:\/\/arielle.com.au\/how-to-buy-gold-in-australia\/\">read our guide to buying gold in Australia<\/a>).<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>Although the bank's current forecast is for no change to the cash rate over 2026. <\/p>\n\n\n\n<p>Hikes only come into play if capacity is more constrained than anticipated, or economic activity heats up and outstrips supply.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em>\u201cAs always, inflation and the jobs market will be the key indicators to watch moving forward,\u201d Yeaman said.<\/em><\/span><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. US Fed's Interest Rates.<\/strong><\/h3>\n\n\n\n<p>The RBA cash rate currently sits at 3.60%, while the US Federal Reserve's recent series of cuts reduced rates to 3.75% - 4.00%.<\/p>\n\n\n\n<p>It\u2019s unclear how many additional cuts are coming, but ING estimates that Australia will have the highest central bank rate in G10 by mid-2026.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">The rate differential can encourage investor funds to flow out of the American economy, increasing demand for the AUD and devaluing the US dollar.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>Any benefit from differing rates of policy easing could be impacted by:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Heightened<\/strong> fears of rate rises in Australia or delays to Fed cuts due to US inflation and jobs data.<\/li><li><strong>A negative<\/strong> outlook for China, with traders often treating the AUD as a proxy for Chinese prospects.<\/li><\/ul><\/div><\/div>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Did You Know?<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">The Australian dollar has a floating exchange rate and is considered a <em>dirty float<\/em>, as the RBA can intervene in the foreign exchange market to influence the price.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. China's Economic Slowdown.<\/strong><\/h3>\n\n\n\n<p>The world\u2019s second-largest economy is our largest export market.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em><em>But China's\u00a0<\/em><a href=\"https:\/\/ecfr.eu\/article\/the-introverted-power-why-this-time-really-might-be-different-for-chinas-economy\/\"><em>unsustainable property development<\/em><\/a><em>, growing debt and\u00a0trade tensions with the US don\u2019t bode well for Australia\u2019s export earnings.<\/em><\/em><\/span><\/div><\/div>\n\n\n\n<p>AMP economist My Bui <a href=\"https:\/\/www.amp.com.au\/resources\/insights-hub\/econosights-is-china-winning-the-trade-war\">said<\/a> in October 2025 that Chinese economic activity had been losing momentum and retail spending was sluggish.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\"><strong>Important!<\/strong><\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">China\u2019s GDP growth slowed to 4.8% according to July-September quarter 2025 data, compared to 5.2% the previous quarter. The country is aiming for annual growth of 5%.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>However, Bui said China\u2019s economy was holding up:<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em>\u201cA key driver for growth has been the resilient trade surplus, despite rising tariff rates on exports to the US, supported by the shifts in export destinations and product mixes as well as higher commodity prices,\u201d she said.<\/em><\/span><\/div><\/div>\n\n\n\n<p>It also has a \u2018trump card\u2019. It has scaled up production of rare earth commodities (which the US needs and largely imports) and key minerals involved in EV, chip, and energy infrastructure.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-and-us-dollar-exchange-rate-1024x791.jpg\" alt=\"\" class=\"wp-image-120657\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-and-us-dollar-exchange-rate-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-and-us-dollar-exchange-rate-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-and-us-dollar-exchange-rate-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-and-us-dollar-exchange-rate.jpg 1500w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><em>Above: China has the upper hand in trade negotiations with the US for now due to its majority production of minerals and rare earths.<\/em><a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<p>On 21st November, global investment bank Goldman Sachs <a href=\"https:\/\/www.goldmansachs.com\/insights\/articles\/chinas-economy-is-forecast-to-grow-faster-than-expected-in-2026\">revised<\/a> up its forecast for China\u2019s 2025 real GDP growth from 4.9% to 5%, and made even larger increases to predictions for 2026 and 2027.<\/p>\n\n\n\n<p>Continued strength in China\u2019s manufacturing and exports have been boosted by two recent developments, the bank argues:<a id=\"_msocom_1\"><\/a><\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>A new<\/strong> Five-Year Plan proposal for China that calls for upgrades to industries and growth in new energy.<\/li><li><strong>An agreement <\/strong>between President Trump and President Xi on tariffs that reduced the potential 100% rate on Chinese goods.<\/li><\/ul><\/div><\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"463\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-and-the-chinese-economy-1024x463.jpg\" alt=\"\" class=\"wp-image-99696\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-and-the-chinese-economy-1024x463.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-and-the-chinese-economy-300x136.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-and-the-chinese-economy-768x347.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-and-the-chinese-economy.jpg 1148w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Not only does a poorly performing Chinese economy reduce demand for the Aussie dollar, it can encourage capital flows to the US, further strengthening the greenback.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Terms Of Trade And Commodity Prices.<\/strong><\/h3>\n\n\n\n<p>An increased demand for Australian exports means an increased demand for AUD. But export volumes and prices hinge on global demand.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/interest-rate-forecast-australia\/\">Will Interest Rates Drop Below 3% In 2026?<\/a>)<\/strong><\/p>\n\n\n\n<p>Iron ore is Australia\u2019s largest export, and China is our largest export market. <\/p>\n\n\n\n<p>A recent Australian Government&nbsp;resources update posits that lower iron prices would reduce national export earnings from $113b in 2025-26 to $103 billion in 2026-27.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">China has a mounting inventory of iron ore despite a contraction in steel output. But with new supply of iron ore from other regions \u2014 the commodity\u2019s price is tipped to soften and trade around US$93 a tonne in 2026.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>Whether we like it or not, China\u2019s thirst for our products affects our prosperity and currency strength.<\/p>\n\n\n\n<p>Volatility in commodity prices driven by a range of other factors (e.g., supply chain disruptions or natural disasters) can also create volatility in the AUD foreign exchange rate.<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>How much <\/strong>Australian exporters can charge for their goods directly impacts how many Australian dollars are required to purchase the same quantities. More demand for our currency lifts the exchange rate.<\/li><li><strong>Valuable commodity exports<\/strong> incentivise<strong> <\/strong>foreign investment in companies producing those commodities. Additional capital inflow from overseas can further boost demand for the Aussie. <\/li><\/ul><\/div><\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"463\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-is-a-commodity-currency-1024x463.jpg\" alt=\"\" class=\"wp-image-99708\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-is-a-commodity-currency-1024x463.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-is-a-commodity-currency-300x136.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-is-a-commodity-currency-768x347.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/australian-dollar-is-a-commodity-currency.jpg 1148w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Of course, some exporters and multinationals benefit from a softer AUD, through more competitive prices or from the favourable conversion of offshore earnings into USD.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Global Stability And Geopolitics.<\/strong><\/h3>\n\n\n\n<p>Australia has a stable government, but our financial markets are not immune to increasing instability globally.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/what-causes-the-australian-dollar-to-go-up-1024x791.jpg\" alt=\"\" class=\"wp-image-99688\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/what-causes-the-australian-dollar-to-go-up-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/what-causes-the-australian-dollar-to-go-up-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/what-causes-the-australian-dollar-to-go-up-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2024\/01\/what-causes-the-australian-dollar-to-go-up.jpg 1400w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em><em><em>The US Dollar's \"safe haven\" status is looking shaky \u2014 but its currency still has an advantage if confidence can be restored.<\/em><\/em><\/em><\/span><\/div><\/div>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">A so-called \u2018risk-on\u2019 currency like the AUD doesn\u2019t tend to perform well in times of increased fear, uncertainty, and doubt.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<p>Currency swings could be impacted in 2026 by:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Whether the US <\/strong>slides back into recession risk territory.<\/li><li><strong>Trade negotiations by new US President<\/strong>\u00a0Donald Trump and how it impacts global tensions.<\/li><li><strong>The Russian invasion of Ukraine<\/strong>, which has contributed to increased global oil and gas prices (affecting inflation), and continues to negatively impact sentiment.<\/li><li><strong>Middle Eastern conflicts<\/strong>, including whether peace can hold in the Israeli-Palestinian conflict, and potential escalation of tensions with Iran and Houthi militants in the Red Sea. <\/li><\/ul><\/div><\/div>\n\n\n\n<p>Increased geopolitical turmoil can significantly disrupt international trade and fuel ongoing concern about oil prices, which could increase inflationary pressure and a flight-to-safety by investors.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Stable Is The AUD To USD Exchange Rate?<\/strong><\/h2>\n\n\n\n<p>Historically, the AUD\/USD exchange rate has averaged around 0.70-0.75c.<\/p>\n\n\n\n<p>However, it\u2019s dropped sharply on a number of occasions, such as following the attack on New York\u2019s Twin Towers in 2001 and more recently during the COVID lockdowns in 2020 when it fell to an 18-year low of 0.55 US cents.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>The Australian dollar was first floated (made available on the Forex market) in December 1983.<\/span><\/div><\/div>\n\n\n\n<p>It appreciated against the US dollar in the decade up to 2011, largely driven by Australia\u2019s mining boom, increasing from below US$0.50 in 2001, reaching parity in 2010, and then a peak of over $1.10 in 2011.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span><em>Fears around COVID-19 that led to a run on USD saw the Australian dollar fall to an 18-year low of US$0.55 in 2020.<\/em><\/span><\/div><\/div>\n\n\n\n<p>After starting 2023 around the US$0.68c range, the Australian dollar weakened throughout the year.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/how-to-buy-bonds-in-australia\/\">How To Buy Bonds In Australia<\/a>).<\/strong><\/p>\n\n\n\n<p>Two likely causes: both local and global economic conditions were not positive, and our currency is risk-sensitive.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Did you Know?<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">When markets fear a global recession, investors have tended to shy away from the Australian Dollar in favour of the US Dollar, a \"safe haven\". This reduces the demand for the AUD on the foreign exchange markets, weakening its exchange rates.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><strong>Is The Australian Dollar Set To Rise?<\/strong><\/strong><\/h2>\n\n\n\n<p>Broadly, the predictions point to a slight rise in the AUD relative to the USD over 2026.<\/p>\n\n\n\n<p>The US currency has lost gains made in the rally prior to Trump\u2019s re-election, damaged by Trump\u2019s see-sawing decisions on tariffs. &nbsp;<\/p>\n\n\n\n<p>But trade tensions appear to be settling, meaning the USD could be bolstered. <\/p>\n\n\n\n<p>Especially if the data indicates economic resilience and the fact that US interest rate cuts may be more gradual than anticipated.<\/p>\n\n\n\n<p>Trump\u2019s policies, inflation risk in both the US and Australia, and China\u2019s growth levels, will all influence the Aussie\u2019s value.<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>Jody<\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 11<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>Relative to the US dollar, the Australian dollar dropped close to five-year lows at the start of 2025. It\u2019s been<\/p>\n","protected":false},"author":14,"featured_media":97708,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_uag_custom_page_level_css":"","_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[324,267],"tags":[],"class_list":["post-97704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-outlook","category-money"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>AUD To USD Forecast: Will The Aussie Hit US$0.70 In 2026?<\/title>\n<meta name=\"description\" content=\"Can the Australian dollar hit US$0.70 in 2026? 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During my 20+ year career, I've reported for Australian business publications and bodies, including Forbes, The Chainsaw and NSW Business Chamber.","sameAs":["https:\/\/www.linkedin.com\/in\/contentquill\/"],"url":"https:\/\/arielle.com.au\/author\/jody\/"}]}},"modified_by":"Steven McConnell","uagb_featured_image_src":{"full":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast.jpg",1490,839,false],"thumbnail":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast-150x150.jpg",150,150,true],"medium":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast-300x169.jpg",300,169,true],"medium_large":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast-768x432.jpg",768,432,true],"large":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast-1024x577.jpg",1024,577,true],"1536x1536":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast.jpg",1490,839,false],"2048x2048":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast.jpg",1490,839,false],"alm-thumbnail":["https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/11\/australian-dollar-forecast-150x150.jpg",150,150,true]},"uagb_author_info":{"display_name":"Jody McDonald","author_link":"https:\/\/arielle.com.au\/author\/jody\/"},"uagb_comment_info":8,"uagb_excerpt":"Reading Time: 11 minutesRelative to the US dollar, the Australian dollar dropped close to five-year lows at the start of 2025. It\u2019s been","_links":{"self":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/97704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/comments?post=97704"}],"version-history":[{"count":166,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/97704\/revisions"}],"predecessor-version":[{"id":120661,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/posts\/97704\/revisions\/120661"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/media\/97708"}],"wp:attachment":[{"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/media?parent=97704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/categories?post=97704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arielle.com.au\/wp-json\/wp\/v2\/tags?post=97704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}