Australian Dollar Forecasts Lifted at JP Morgan
- Written by: Gary Howes
🎯 GBP/AUD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.
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Investment bank JP Morgan raises its Australian dollar forecast profile.
Analysts at the bank say they maintain a "bullish view on Antipodean FX" and "raise near-term forecasts to reflect growing confidence in their respective catalysts."
The call comes following a strong spell of performance for the Australian and New Zealand dollars, which have recorded strong gains against G10 peers this year.
"AUD is uniquely positioned with a hiking cycle underway, and net portfolio flows supported by strong fiscal metrics and changing FX hedging behaviour. The debasement trade adds a kicker, as it resurrects the ‘normal’ negative, pre-2020 commodity/USD correlation usually associated with procyclical AUD," says JP Morgan.
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Analysts explain, "carry had been the missing link last year, which makes the RBA’s hike this week a watershed moment."
Carry is where investors borrow in a low interest rate currency and invest in a high interest rate alternative to generate a positive return.
Australia's cash rate has risen above the Fed Funds target range, which JP Morgan says crystallises positive rate spreads between Aus and the U.S. "through the term structure."
The bank raises its near-term forecasts for AUD/USD at June 2026 to 0.73 from 0.68 and December 2026 to 0.69 from 0.68.
GBP/AUD is forecast at 1.93 in June and 1.97 at the same time points.
🎯 GBP/AUD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.
