USDAUD Forecast highlights:
- AUDUSD slumps to 3-year lows (AUD stronger)
- Rate attempting to establish floor at 1.400; resistance noted at 1.450-1.50
- Choppy trading expected due to macro events
How has USDAUD performed recently?
The US dollar has been haemorrhaging strength over the past year.
Against the Aussie dollar, the rate has not been able to surpass the 1.680 peak established in last April. In fact, the rate kept sliding further away from high throughout the second half. Whilst the floor at 1.500 was able to hold off USD decline for a while, eventually it gave way. Once it did, prices slumped to 1.400 in a matter of weeks. The level was last traded three years ago.
Why was the USD weak? One of the reasons was the quiet diversification out of USD assets since the ‘Liberation Day’. Investors were concerned about the volatility of trade policies, over-priced stock valuation and the stability of dollar system. As a result, long-term institutional investors started to re-allocate capital under the radar to other non-US markets, thus dampening demand for the dollar.
There is also a plus point for the AUD, in that the commodity boom returned to support the continent’s currency. Copper prices, in particular, stayed elevated throughout 2025. This boosts the country’s exports. The jump in energy prices is set to expand Australia’s gas sales. As noted in other guides, the AUD has been gaining ground against Pound Sterling and the Euro.
Until the above macro factors fade away, the picture here is clear: AUD will continue to hold its ground against the greenback. 1.400 is the short-term floor and there is a thick overhead resistance at 1.450-1.500 to limit the fx’s medium-term upside.
Is it a good time to buy US dollars with AUD?
The answer is affirmative. Now is a good time to buy USD with AUD.
The US dollar is currently weak; AUD strong. If you need the USD in the near term, any rate below 1.44-1.45 would be a good area to buy USDs.
Given the fx rate is at 3-year lows, should we not wait and see if USDAUD can break 1.400? The risk here is that the USD may rebound. Market volatility is rising and investors may buy dollars to ride out the market storm. If you can’t decide, split the buying into tranches. This may give you some space to decide.
Will USD get stronger in the second half of 2026?
An energy shock is probably coming.
The first week of March saw a severe price dislocation in the global energy market. Geopolitical tensions are fuelling a massive spike in crude oil prices.
From low sixties in February, prices on March 9 surged to $120 a barrel. This is almost a 100% jump in six weeks. When oil prices are rising as fast as this, it will create deep reverberations across the global economy.
First, prices for fuel will rise substantially in many countries. Fuel like petrol (ICE engines), diesel (buses, locomotive) and jet fuel. Consumers and businesses will have to pay more to run their operations. Consumption will drop as more incomes are diverted to procuring energy. This may lead to lower economic activities (eg consumption). Eventually, we may be looking at a recession.
Second, inflation rates will shot up. This will limit the monetary action of central banks. Cutting interest rates to boost economic growth is not possible under this scenario. Already, many investors are dumping gilts and US treasuries in fear of this “stagflation”.
Given the above factors, what will happen to the USD?
For now, nobody knows for sure. The dollar has been coming under some selling pressure in recent months. But that may change if geopolitical tensions continue to hit market sentiment. After all, the dollar is the lynchpin of the global economic system. If there is a whiff of systemic turbulence in the air (possibility in the next few sessions), investors tend to buy the US dollar.
Moreover, United States is a large exporter of crude oil and crude oil products. Did you know this: since 2020 USA is a net exporter of crude oil? According to the EIA:
In 2020, the United States became a net exporter of petroleum for the first time since at least 1949.
Accordingly, high oil prices may benefit the country economically (since Gulf oil supplies are knocked out of the game). This may lead to higher US dollar.
In all, USDAUD may be set for a period of choppy trading as energy and economic factors bombard the market. Prior assumptions may be rendered obsolete in the world of $100 oil.
Source: yardeni.com
What is the USDAUD forecast in weeks?
Market brokers are taking a relatively bearish stance on USDAUD. As seen below, the aggregate forecasts of the fx rate is trending lower (AUD stronger).
This means the USD is set to become weaker for the next two quarters, potentially touching the mid-thirties (1.350).
Given what is happening in the Gulf right now, these forecasts may be stale by this time next week. Therefore, I would stick to the charts for now. And the chart is showing a near-term floor at 1.400 and medium-term resistance at 1.450-1.500.
Source: ExchangeRates.org.uk (March 26)
Jackson is a core part of the editorial team at GoodMoneyGuide.com.
With over 15 years of industry experience as a financial analyst, he brings a wealth of knowledge and expertise to our content and readers.
Previously, Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University and has authored over 200 guides for GoodMoneyGuide.com.
