Overview
- The Aussie has risen more than 6% in 2025 and recently jumped about two US cents, trading near 66 US cents into late December.
- The Federal Reserve delivered a third straight 25-basis-point cut to around 3.6% in December, while the RBA held at 3.6% and signalled cuts are unlikely for now.
- CBA and NAB now expect Governor Michele Bullock to lift the cash rate by 0.25 percentage points at the February meeting, reinforcing a wider rate gap with the US.
- Analysts project further gains next year, with targets around 72–73 US cents and UBS flagging a conditional 10%–40% upside scenario.
- Iron ore and broader commodity trends remain pivotal, with risks from a commodity downturn, growth setbacks that force RBA easing, or US political pressure on the Fed, even as a stronger AUD aids travellers and importers but weighs on exporters and miners.