May 2026
The commodity-linked AUD, CAD and NZD were buoyed by the risk-on tone
from the peace talk developments. However, reduced bet for an interest rate
hike by the Reserve Bank of Australia in June contributed to capping the upside
for the AUDUSD pair.
April 2026
The commodity currencies including AUD was well-supported in the market as they are increasingly behaving as safe haven assets during this Iran war. With investors clinging to hopes of a resolution in the Middle East tension, risk-sensitive AUDUSD pair picked up to 0.7150. The risks are skewed to the upside, while support at 0.7085 remains in place. As long as the support level is not breached, there remains a chance that AUD will continue to ride on an upward momentum.
March 2026
About 3% of GDP comes from gas and coal exports for Australian economy and Australia’s strong net-energy trade balance (total energy exports – total energy imports) continued to support AUD. After another rate hike, The AUD inched up versus USD closing back above 0.71. Elevated borrowing costs can attract more foreign investment, bolstering the appeal for AUD.
February 2026
AUDUSD is rising back above 0.70 level as the market prices in more interest rate hike by the Reserve Bank of Australia (RBA). The RBA raised rate by 25bps and presented hawkish outlook due to sticky inflation.
Despite recent metals sell-offs affecting Australia’s terms of trade, AUD has continued to strengthen supported by the RBA’s latest interest rate hike. Additional rate hike from the RBA is anticipated with their focus on underlying inflation. This continued hawkishness from RBA will provide a stronger backdrop for the AUD versus USD, which is facing headwinds from the policy decisions and soft economic data. Caution over sticky inflation and any further price increases are likely to invite more monetary policy tightening from the RBA.