I’ve recently noticed that the performance of the Australian dollar is quite interesting. As soon as the ceasefire agreement between the U.S. and Iran was signed, global risk sentiment immediately improved, and the safe-haven currency, the US dollar, was suppressed. Conversely, risk assets like the Australian dollar started to rally. On April 9th, AUD/USD rose to 0.7095, climbing for four consecutive days. This momentum is definitely worth paying attention to.

But what truly supports the future trend of the Australian dollar is not just the short-term factor of geopolitical easing. Westpac Bank’s analysis points out that the Iran conflict has driven up coal and natural gas prices. Australia, as a major exporter of these commodities, is expected to gain a significant windfall over the next five years. Gold is even more remarkable; it is projected to become Australia’s second-largest export product by the end of June this year, surpassing liquefied natural gas and coal.

There’s also an interesting logic behind this. Rising commodity prices boost tax revenues. The Reserve Bank of Australia has already raised interest rates twice due to high inflation, and the current rate is 4.10%. The market expects a 60% chance of another rate hike in May, with rates possibly approaching 4.60% by the end of the year. Higher interest rate differentials make the Australian dollar even more attractive.

Overall, the sustained ceasefire, support from commodity prices, and the possibility of continued rate hikes by the central bank all add up. The Australian dollar’s future outlook should have room to rise. US banks, Westpac, and the Commonwealth Bank of Australia all forecast that by the end of 2026, AUD/USD could reach 0.73. Of course, all this depends on the ceasefire holding steady. If negotiations encounter variables, the outlook for the Australian dollar may need to be reassessed.