AUD/USD: Rabobank anticipates a move back to 0.71 within 3 to 6 months

Rabobank’s Perspective on the Australian Dollar

Jane Foley, Senior FX Strategist at Rabobank, highlights that although the Reserve Bank of Australia was the sole G10 central bank to raise interest rates last week, the Australian Dollar has recently lagged behind other major currencies. She attributes this underperformance to earlier strength in the AUD and evolving expectations for G10 interest rates. Based on current energy market projections, Foley anticipates that AUD/USD could climb back to 0.71 in the coming months, with a potential rise to 0.72 within a year.

Assessing the AUD’s Strength Amid Global Uncertainty

Last week, out of eight G10 central banks announcing policy decisions, only the RBA opted for a rate hike. Despite this, the Australian Dollar has not shown notable gains against its peers over the past month, week, or day. Foley notes that this muted performance is partly due to the AUD’s position as the top-performing G10 currency so far this year.

Looking ahead, Foley warns that a decline in global risk appetite—especially in response to conflict-related developments—could trigger renewed demand for the US Dollar as a safe haven, putting pressure on AUD/USD. Rabobank’s energy analysts expect that if the Strait of Hormuz remains closed until late April, shipping activity will gradually recover, with oil and refined product flows reaching about 80% of pre-conflict levels by August.

Although disruptions in refined petroleum supplies pose risks to both inflation and economic growth, Australia’s status as a net energy exporter is likely to help shield its trade balance during this period, which in turn should lend some support to the AUD.

Given these factors, Rabobank maintains its forecast for AUD/USD to return to the 0.71 range within three to six months, and continues to target 0.72 over the next twelve months.

(This report was produced with the assistance of artificial intelligence and subsequently reviewed by editorial staff.)