Australian Dollar: Modest upside bias into 12 months – Rabobank

FXStreetAug 6, 2026 12:43 PM

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Rabobank’s Senior FX Strategist Jane Foley notes AUD/USD has trended higher since July, mainly due to a softer US Dollar (USD), with the Australian Dollar (AUD) mid-pack versus G10 peers. Shifting expectations for further Reserve Bank of Australia (RBA) rate hikes, especially after strong labour data and softer Q2 CPI, are key drivers. Foley still sees November hike risk and has lifted its 3‑month AUD/USD forecast to 0.71.

RBA path and trade data in focus

"Despite a move lower today, AUD/USD has been gently trending higher since the start of July. The move is mostly the result of the softer USD since in that timeframe, the performance of the AUD is right in the middle of the pack vs. its G10 peers. That said, market expectations regarding the potential for further RBA rate hikes this year have swung in this period, providing a source of direction for the AUD."

"In Rabo’s view there is still risk of one more rate hike this year in November. The market will be hoping that the RBA’s August 11 policy meeting will provide more clarity on rate hike risks. We continue to forecast a modest upside bias in AUD/USD out to 12 months, mostly on the back of a moderately softer tone in the USD and the view that Fed rate hike expectations are overdone."

"We have raised our 3-month forecast to AUD/USD 0.71 from 0.70."

"While the movements in AUD/USD in the coming months will continue to be driven by expectations regarding RBA policy and the perceived inflation risk, today’s better than expected release of Australian trade data does shine a light on structural developments within the economy."

"That said, in terms of near-term impact on the AUD, it is unlikely to outshine the reaction to RBA policy guidance on August 11."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Disclaimer: The information provided on this website is for educational and informational purposes only and should not be considered financial or investment advice.

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