Recently, I’ve noticed that the Australian dollar is performing quite well, with the AUD/USD climbing steadily. It rose to 0.6727, setting a new high for some time. From the beginning of the year to now, the cumulative gain has been over 8%. Many people are watching to see how the AUD will develop in the future.

The logic behind it is actually not hard to understand. The Reserve Bank of Australia is seeing an inflation rebound, and the meeting minutes also point to a hawkish stance—markets generally expect them to raise interest rates. By contrast, the U.S. Federal Reserve is still in a rate-cutting cycle, and this divergence in monetary policy naturally supports the AUD. In addition, gold, silver, and copper have been continually making new highs lately. As Australia is a major resource-exporting country, rising commodity prices are beneficial for the economy, which has also helped drive the AUD’s performance.

As for what institutions have to say, Deutsche Bank believes the interest-rate differential advantage of the AUD among G10 currencies will continue to expand, and it expects AUD/USD to rise to around 0.71. The National Australia Bank’s outlook is similar: it estimates the central bank will raise rates 2 times, and the AUD will strengthen further.

However, whether the AUD can sustain its strength depends on a few key timing points. High-impact news such as CPI data and central bank interest-rate decisions will directly affect market expectations for rate hikes, which in turn will determine the AUD’s subsequent trend. Over this period, the future movement of the AUD is still worth monitoring.