Forecasts and predictions for the Australian dollar change all the time, affected by news events and relative sentiment towards the Australian economy. This continually updated article reviews AUD bank forecasts and popular cross-rate trends.
Australian dollar markets and forecasts
At the start of the week the Aussie spiked back over US69¢ after the weekend’s surprise election result when the nation’s centre-right government managed to cling to power.
The mid-April to mid-May period was a shocker for the Australian dollar. It suffered across-the-board losses, including losses worth 5 percent against the US dollar. An exchange rate of US68.6¢ on Friday May-17 was the Aussie’s lowest weekly closing rate since early 2016.
Most recently, a stuttering domestic economy and elevated trade tensions have driven the Aussie lower.
Following data on May-16 that showed a jump in the unemployment rate, which the RBA has said it is “paying close attention to,” implied probabilities for an interest rate cut in June rose to 60 percent, and that doesn’t bode well for near-term currency valuations.
AUD to USD Forecasts
In May, a senior advisor at GSFM made “something like the mid-60s a reasonable target” for the Australian dollar. Since 2009, the Aussie hasn’t been valued at anything less than 67.4¢. That prediction is even more bearish than those by Westpac and JP Morgan, who in March both predicted an Aussie slide to 68¢ by year-end.
AUD to GBP Forecasts
British politics is highly volatile and therefore FX forecasts with any GBP component are extremely difficult. The Aussie should gain several percent against the pound if British PM Theresa May is replaced by a Brexit-supporting Conservative (a possibility in June) since this would increase no-deal chances. A no-deal Brexit will likely produce AUD/GBP rates near £0.6 based on implied forecasts from HSBC. If Brexit is cancelled, rates could plummet to £0.45.
AUD to EUR Forecasts
AUD/EUR could be a lot lower by year-end, at rates between €0.56 and €0.59, based on implied forecasts from Danske Bank. Euro strength will likely follow a conclusion to Brexit, expected sometime in the second half of 2019, and will compound Aussie weakness (see AUD/USD forecast, above).
AUD to JPY Forecasts
Capital Economics forecasts that “rising safe-haven demand will boost the yen by 5 percent against the US dollar, to ¥105,” implying roughly a 10 percent decline in AUD/JPY from mid-May’s rates, to the low ¥68s.
AUD could rally against the Indian rupee in the coming half year, potentially to ₹52, based on AUD/INR’s proximity to a major support level (₹48.5) and a number of rupee-negative factors.
AUD General Info and Influences
The Australian dollar is the fifth most traded currency in the world and is popular with currency traders, because of the high interest rates in Australia, the freedom of the foreign exchange market from government intervention, the stability of Australia's economy and political system, and the view that the Australian dollar offers diversification benefits in a portfolio containing the major world currencies, especially because of its greater exposure to Asian economies and the commodities cycle.
The currency is commonly referred to by foreign-exchange traders as the "Aussie dollar".
Currency Exchange Locations
We have put together these guides to the major city CBDs where you will often find the best deals for buying foreign cash in Australia.
Recent AUD news articles
The British pound fell on Wednesday for a record thirteenth consecutive day against the euro. The currency is taking a Brexit-induced beating days before May’s half-term school break — a popular time in the UK for family holidays.
Last update: 22 May, 2019
The Australian dollar is now worth only 68.6¢ after another week of heavy losses, and now one senior analyst has predicted exchange rates in the “mid-60s” this year – rates not seen since 2009.
Posted: 18 May, 2019
The British pound fell on Wednesday towards a 3-month low against the euro and US dollar as attention turned back to Brexit and after lower-than-expected wage growth lessened prospects for a Bank of England rate hike.
Last update: 15 May, 2019