The market outlook for the AUD to CNY exchange rate is currently range-bound.
Key drivers include the interest rate differential, as the Reserve Bank of Australia is expected to raise rates in early 2026, contrasting with the People's Bank of China's cautious stance on monetary easing. Additionally, Australia's positive economic growth, coupled with strong commodity demand, supports the Aussie. In contrast, China's projected gradual appreciation of the yuan is fueled by narrowing yield differentials and a probable stabilization in its economic growth targets.
In the near term, the trading range for AUD/CNY is expected to remain stable, reflecting recent volatility reflected in a tight 3% range. Upside risks could stem from stronger-than-anticipated Australian export performance or a sharper rate hike from the RBA. Conversely, downside risks may arise from any unexpected easing measures from the PBOC or significant geopolitical tensions impacting market sentiment.