The AUD to SBD exchange rate has a bullish bias, reflecting expectations for Australian economic strength.
Key drivers include the anticipated interest rate hikes by the Reserve Bank of Australia, with rates projected to rise to 3.85% in early 2026 due to persisting inflation above target. This rate increase is likely to attract foreign investment and bolster the AUD. Additionally, the Solomon Islands' adoption of an expansionary monetary policy aims to support growth, which may limit the SBD’s competitiveness.
The expected trading range for AUD/SBD over the next 1 to 3 months is likely to stay within a narrow band, given its recent stability around 5.4448, just over 0.9% higher than the three-month average of 5.3987.
Upside risks include stronger commodity prices that could further support the AUD. On the downside, any significant geopolitical tensions or a slowdown in Australia's trade with China could weigh on the AUD's performance.