For the Australian dollar, a more bullish scenario than our baseline outlook would stem from China’s economic revival exceeding expectations – particularly if it is led by a policy-induced upswing in commodity-intensive infrastructure spending. Stronger momentum in China would be a positive impulse for Australia’s terms of trade, the domestic and regional economies, and the currency. In our opinion, the Australian dollar could also outperform if the global economy remains resilient in the face of tighter monetary and credit conditions, and inflation decelerates substantially without aggressive policy actions inflicting much damage on labour markets or generating financial stability risks. However, we judge this type of situation to be relatively unlikely.
Latest Analysis
Latest Analysis
Powell Turns Dovish in Jackson Hole, Triggering Dollar Plunge
22 August, 2025
Federal Reserve Chair Jerome Powell provided a clear signal that the central bank will soon resume cutting interest rates in a speech at the Jackson Hole Economic Symposium this morning. “The balance of...
US Rate Cut Expectations Tumble Ahead of Jackson Hole
22 August, 2025
The trade-weighted dollar is holding near a two-week high after yesterday’s hotter-than-anticipated activity data triggered a dramatic reappraisal of the Federal Reserve’s expected easing trajectory, lowering...
What will Chair Powell say?
21 August, 2025
• Cautious tone. Hawkish Fed soundbites & positive US data saw yields tick higher. US equities slipped back. AUD & NZD remain on the backfoot.• Fed speak. Chair Powell speaks at Jackson Hole tonight....
Outlook Improves As Global Private Sector Activity Rebounds
21 August, 2025
A hint of cautious optimism is creeping into currency markets this morning after a raft of activity gauges suggested that the global private sector is proving surprisingly resilient in the face of the...
Currency Markets Steady As Traders Await Fed Communications
20 August, 2025
It’s quiet. Too quiet. Most major currency pairs remain trapped in tight price ranges this morning as volumes fall, but the dollar is firming slightly as traders hedge themselves against an unexpectedly-hawkish...
RBNZ: who let the doves out?
20 August, 2025
After holding steady last time out the Reserve Bank of New Zealand once again spread its ‘dovish’ wings at today’s policy meeting. As expected, the RBNZ announced another 25bp cut which lowered the Official...
Markets hit an air pocket
19 August, 2025
• Market wobbles. A small bout of risk aversion overnight. US equities declined while the USD ticked up. AUD & NZD lost some ground.• RBNZ meeting. RBNZ expected to cut rates again today. Will it flag...
Currency Market Price Action Slows, Canadian Inflation Eases
19 August, 2025
A sense of calm has descended upon global financial markets as the data cadence slows, geopolitical developments settle to a dull roar, and monetary policy expectations stabilise. Benchmark Treasury yields...
Traders Turn Cautious in Run-Up to Jackson Hole
18 August, 2025
Good morning, and welcome back. In the US, ten-year Treasury yields are holding near last week’s levels, equity futures are setting up for a modest advance at the open, and the dollar is trading near a...
Jackson Hole in focus
17 August, 2025
• Consolidation. US equities drifted back a bit on Friday, but still rose over the week. USD a little softer. AUD & NZD ticked up modestly.• Event Radar. RBNZ expected to cut rates again (Weds). Global...