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The Australian Dollar is tipped to extend a recent advance against the Euro and British Pound by a trader on JP Morgan's dealing desk.
In a daily note detailing his tactical stance to clients, the trader says he is 'long' the Aussie against a basket of other currencies.
The decision rests in part on this week's news that President Donald Trump is minded to exclude Australia from a 25% global tariff on all imports of steel and aluminium.
"The fact that he said that Australia is being 'considered' for an exemption should mean that AUD will outperform on crosses," says the trader.
After telling reporters there would be no exemptions, Trump noted Australia was one of the few countries with which the United States ran a trade surplus.
"We have a surplus with Australia. One of the few. And the reason is they buy a lot of airplanes. They're rather far away and they need lots of airplanes," Trump said.
As a free, open economy reliant on global trade, Australia remains exposed to a broader trade war.
However, the assessment behind the 'long' AUD trade is that Australia is likely to weather the undercurrents of a readjustment to trade dynamics.
"With that in mind, and with the Australian economy holding up better than most, EURAUD (the EU still in the firing line), GBPAUD (the outlook for the UK economy is ugly), and AUDNZD (relative underperformance in NZ) all look poised to extend recent moves, and I therefore have a basket of AUD longs in the portfolio," says the trader.
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Above: GBPAUD entered a short-term downtrend in 2025. Some are betting it will extend.