While the Aussie had been hovering around US 65.0 cents for the past week, it gained some upward momentum following a meeting between United States Treasury Secretary Scott Bessent and Chinese officials in Malaysia over the weekend.
China’s top trade negotiator, Li Chenggang, told reporters the two sides had reached a “preliminary consensus”, while Bessent said there was “a very successful framework”.
Bessent also told US television that the threat of extra 100 per cent tariffs on China was “effectively off the table”.
He added there were initial agreements to stop the precursor chemicals for fentanyl from coming into the US, and that Beijing would make “substantial” purchases of soybean and other agricultural products while putting off export controls on rare earths.
The developments boosted the Australian dollar, lifting it up to about 65.4 US cents this afternoon.
While that’s still shy of the year-best heights reached in September and earlier this month, when it cracked the 66-cent mark, forecasters are expecting it to continue rising.
In a new report released this morning, Oxford Economics head of economic research and global trade Harry Murphy Cruise said the Aussie dollar would reach 66 cents against the greenback by the end of the year, before rising further in 2026.
“Tariffs, government shutdowns, and mass deportations are self-inflicted wounds (for the US dollar), and investors are looking elsewhere in response,” he said.
“Commodity price weakness and China’s slowing economy will temper gains (for the Australian dollar), but not offset the appreciation drivers,” he added.
“We expect the Aussie to end the year at $0.66 to the US dollar and $0.68 by the end of 2026.”
The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
