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Natixis updates its Australian dollar forecasts.
The Australian dollar is expected to strengthen further this year as growth momentum, higher commodity prices and shifting interest rate differentials tilt in its favour, according to research from Natixis.
The Paris-based international bank argues it is premature to fade the recent rally, with the currency supported by a combination of domestic resilience and a more constructive external backdrop.
Stronger economic growth forms a central pillar of the bullish view, with activity holding up better than anticipated despite earlier monetary easing.
Domestic demand remains a key driver, underpinned by private investment and household consumption, even as headline GDP growth moderates.
Labour market conditions reinforce the case for resilience, with employment remaining tight and participation close to historical highs, limiting downside risks to household income.
Inflation dynamics are also shifting the balance, with price pressures proving more persistent than expected and underlying measures moving higher.
Against this backdrop, the Reserve Bank of Australia is seen turning more hawkish, raising the prospect of policy tightening later this year as inflation reasserts itself. The Aussie dollar has outperformed peers over the latter part of 2025 and early 2026 as markets raise the odds that the RBA will hike interest rates later this year.
At the same time, the global policy mix is becoming more favourable for the currency as the US Federal Reserve is anticipated to ease further, narrowing the monetary policy gap in Australia’s favour.
Above: AUD is 2026's best performer.
Commodity prices add another layer of support, with sharp gains in metals such as copper improving Australia’s external position and reinforcing the positive growth and inflation mix.
Taken together, these forces suggest the Australian dollar “can be expected to appreciate further this year, as high as 0.69 against the greenback”.
Natixis’s forecast profile shows AUD/USD rising to 0.68 by June 2026, strengthening to 0.69 by September and December 2026, and reaching 0.70 in both March and June 2027.
On the euro cross, the bank sees EUR/AUD declining steadily from 1.759 in March 2026 to 1.701 by June 2027 as the Australian dollar outperforms.
Using Natixis’s GBP/USD projections, the implied GBP/AUD path points to a gradual move lower from around 2.02 in early 2026 to just below 1.96 by mid-2027, reflecting sustained Australian dollar appreciation.