AUD Trend Forecast 2024: Why Is It Under Continuous Pressure? Can It Rebound in the Future?

What exactly is going on with the Australian dollar? As one of the top five currencies by global trading volume (second only to the USD, EUR, JPY, and GBP), the AUD/USD pair has always been a favorite in the international forex market—liquid, with tight spreads, friendly to both short-term traders and long-term investors.

However, in recent years, the performance of the AUD has disappointed many investors.

Why has the AUD been falling steadily? The fate of commodity currencies is hard to escape

Commodity currency attributes are key

Australia is a major global mineral producer, with exports of iron ore, coal, copper, and other commodities serving as economic pillars. This determines the AUD’s natural characteristic—a commodity currency. As international commodity prices fluctuate, the AUD exchange rate often experiences sharp swings. This is both an advantage and a disadvantage.

From a level of 1.05 in early 2013 to 2023, the AUD/USD has depreciated by over 35%. During the same period, the US dollar index rose by 28.35%, while the euro, yen, and Canadian dollar also weakened against the dollar. What does this indicate? The world has entered a prolonged strong dollar cycle, with the AUD, as a commodity currency, bearing the brunt.

The past decade’s AUD movements have been tumultuous:

• 2015-2016: Commodity prices plummeted, and the AUD hit a new low for the period
• During the COVID-19 pandemic in 2020: Australia’s effective pandemic response and strong iron ore demand led to a sharp rebound of 38%
• 2021-2023: Aggressive rate hikes by the Federal Reserve kept the USD strong, suppressing the AUD
• Q4 2024: The AUD/USD fell by 9.2%, with the whole year under pressure

Entering 2025, risks further intensify. Due to tense global trade relations and recession expectations, the AUD once fell to 0.5933, hitting a near five-year low. Analysts point out that the main issue is the US tariff policies suppressing global trade, and bleak prospects for Australia’s raw material exports (metals, energy), directly weakening the commodity currency support. Meanwhile, the Australian interest rate differential remains difficult to reverse, the domestic economy is weak, and capital continues to flow out.

Is there a chance for the AUD to turn around? Three key variables determine the future trend

Variable 1: RBA policy shift

The stance of the Reserve Bank of Australia (RBA) is crucial. In Q3 2025, Australia’s CPI rose 1.3% month-over-month, far exceeding the expected 0.7%. This puts the RBA in a dilemma—persistent inflation but sluggish economic growth.

At the November meeting, the RBA unexpectedly held rates steady at 3.6%, signaling caution. This conveys an important message: the central bank lacks confidence in controlling inflation, and rate cut expectations are subdued. In the short term, this supports the AUD—as other central banks ease, Australia’s relatively “hawkish” stance makes the AUD more attractive. But once inflation is confirmed to be receding, rate cuts may resume, putting the AUD under pressure again.

Variable 2: USD strength or weakness

The actions of the US Federal Reserve are even more critical. In October last year, the Fed cut rates by 25 basis points to 3.75%-4.00%, completing a second rate cut within the year. However, Fed Chair Powell’s subsequent comments suggest that further rate cuts in December are unlikely.

Although there is market chatter about de-dollarization, the reality is that the dollar index, after bottoming near 96 in mid-year, has rebounded nearly 3%, approaching the psychological level of 100. A strong dollar equals a weak AUD—that’s an iron law. As long as the USD remains strong, the AUD’s upside will be limited.

Variable 3: The pace of China’s economic recovery

Australia’s trade dependence on China is very high; China is its largest trading partner. The health of the Chinese economy directly influences demand for Australian iron ore, coal, natural gas, and other raw materials.

When China’s economy is robust, commodity demand is strong, benefiting the AUD. Conversely, persistent weakness in China’s property sector and slowing growth pose “sales resistance” risks for Australian resources, pressuring the AUD. This is the “lifeline” of the currency.

Is the September rebound just a fleeting moment?

After market panic caused by Trump’s tariffs in April 2025, the AUD gradually rebounded. In September, it surged, with the AUD/USD reaching 0.6636, a new high since November 2024. The triggers were soaring iron ore and gold prices, along with market expectations of Fed rate cuts, rekindling risk appetite.

But can this rebound last? Although the AUD has stayed above 0.64 in the past two months, the upward momentum has noticeably weakened.

What do major banks say about the AUD’s future?

Wall Street’s views on the AUD diverge:

Morgan Stanley is most optimistic, expecting the AUD to rise to 0.72 by year-end. The reasons are the RBA’s hawkish stance and support from commodity prices.

UBS is more cautious, believing that although Australia’s economy remains resilient, global trade uncertainties and Fed policy changes will limit the AUD’s gains, maintaining it around 0.68.

CBA economists are the most conservative, even suggesting the recent rebound may be short-lived. They forecast the AUD will reach a cyclical high by March 2026 but could fall again by year-end. The reason is that if the US economy outperforms other developed economies, the dollar could strengthen anew.

What about the outlook for AUD/RMB and AUD/MYR?

AUD/CNY

The stability of Sino-Australian trade supports the exchange rate. Recently, the RMB has been relatively stable amid US-China relations and central bank policies. Since RMB volatility is lower than USD, AUD/CNY typically declines less than AUD/USD. Over the next 1-3 months, expect the pair to fluctuate between 4.6 and 4.75. If China’s economy weakens, AUD/CNY could short-term rise toward 4.8.

AUD/MYR

The Malaysian ringgit is also sensitive to commodities, with Malaysia’s central bank policies relatively stable. If monetary policy divergence widens (Australia easing, Malaysia maintaining), the ringgit could strengthen. Expect AUD/MYR to fluctuate between 3.0 and 3.15 amid global economic uncertainties. If Australia’s economic data deteriorates, it may test the 3.0 support level.

Investment guide for AUD: short-, medium-, and long-term strategies

Short-term trading (1-3 days): range trading mainly

Long positions require two conditions: a break above 0.6450 resistance, further targeting the 0.6500 psychological level; triggered by US data weaker than expected or Australian CPI unexpectedly warming. Stop-loss at below 0.6420.

Short positions require a break below 0.6373 support, targeting around 0.6300, triggered by strong US data or a significant cooling of Australian inflation.

Medium-term strategy (1-3 weeks): trend-following + policy monitoring

Bullish scenario: Fed rate cut expectations rise (weak employment, falling inflation, easing trade tensions), and risk appetite improves, pushing the AUD toward 0.6550-0.6600. A technical breakout above the 200-day moving average (0.6464) confirms the trend.

Bearish scenario: US economy outperforms expectations, delaying Fed rate cuts, or trade tensions escalate, and China’s data weakens.

Long-term holding (6 months+):

If bullish on the AUD long-term, consider scaling into positions at current lows, smoothing out volatility over time. Once an uptrend is confirmed, increase positions to build a core holding.

How to seize trading opportunities amid high AUD volatility?

The high volatility of the AUD presents both risks and opportunities. Through long and short trading, investors can profit in bull markets and find shorting opportunities in bear markets. Using leverage of 1-200x, small investors can participate in AUD trading, lowering entry barriers.

Of course, leverage is a double-edged sword—high returns come with high risks. Forex trading is a high-risk investment, and investors should implement proper risk management, as there is a possibility of losing all invested capital.

Summary of investment advice

1. Closely monitor three key data points: Australian CPI and employment figures, US GDP and non-farm payrolls, China’s economic growth and property market
2. Central bank policies are critical: RBA and Fed meeting signals will continue to influence the AUD
3. Commodity prices cannot be ignored: Iron ore, gold, crude oil fluctuations directly impact the AUD
4. Geopolitical risks rising: Trade tensions and conflicts may trigger risk aversion, short-term suppressing the AUD
5. Adjust positions flexibly: Combine technical support/resistance levels with fundamental signals to optimize trading strategies dynamically

Currently, the AUD/USD is at a crossroads of technical oscillation and fundamental battles. Short-term, range trading is advisable; breakouts should be followed with trend-following. The medium- and long-term direction ultimately depends on whether the Fed’s policy shifts to easing and whether global trade risks truly ease. Traders should stay alert, closely watch data releases and market sentiment, and adjust strategies accordingly.