The market bias for the AUD to CNY exchange rate is currently bearish.
Key drivers include:
- Interest rate expectations suggest potential hikes from the Reserve Bank of Australia in 2026, which could increase the AUD’s appeal compared to the CNY.
- The Chinese yuan is expected to strengthen gradually due to narrowing yield differentials with the U.S. and positive forecasts for 2026 growth targets, which may bolster demand for the CNY.
- Australia’s economic and security developments, including a recent shooting, may impact consumer confidence and affect the AUD negatively.
In the near term, the AUD to CNY exchange rate is likely to trade within a narrow range.
Upside risks include a stronger-than-expected Australian economic performance boosting the AUD, while downside risks could stem from worsening global risk sentiment leading to a flight toward safer currencies.