The current market bias for the AUD to USD exchange rate is cautiously bullish.
Key drivers include:
- The Reserve Bank of Australia is expected to raise interest rates in early 2026, making the AUD more attractive for investors and potentially increasing its value.
- Economic forecasts point to positive growth for the AUD, backed by expectations that higher rates will outpace those of other major currencies.
- The U.S. Federal Reserve is anticipated to cut rates further, which may weaken the USD and provide additional support for the AUD.
In the near term, the trading range for AUD to USD is expected to remain stable, showing mild fluctuations around its current price.
Upside risks could come from continued strong demand for Australian commodities as global markets stabilize. Conversely, increased geopolitical tensions or further unforeseen domestic issues could pose a downside risk, potentially leading to a depreciation of the AUD.