AUD to RMB Exchange Rate Forecast: Future Trends from a Commodity Currency Perspective

As the fifth-largest traded currency globally, the exchange rate between the Australian dollar (AUD) and the Chinese yuan (CNY) influences trade and investment in the Asia-Pacific region. Forecasting the AUD/CNY exchange rate requires a comprehensive analysis of Australia’s commodity currency characteristics, China-Australia trade relations, and the global macroeconomic landscape. We are now in 2026, and the medium-term trend of the AUD is at a critical turning point.

The AUD is a typical commodity currency—Australia’s economy heavily depends on exports of iron ore, coal, copper, natural gas, and other bulk commodities, with China being the largest buyer of these resources. This unique economic structure creates a close linkage between the AUD and global raw material prices, as well as the RMB’s movement. Additionally, the AUD has historically been a high-yield currency, attracting significant arbitrage flows, though this advantage has diminished in recent years.

Why Is the AUD Under Continuous Pressure? Commodity Currency Dilemma and Strong US Dollar

Since early 2013, when the AUD was around 1.05, it has depreciated over 35% against the USD over the past decade. During the same period, the US dollar index has risen by 28.35%, while the euro, yen, and Canadian dollar have also weakened against the dollar. This indicates that the AUD’s weakness is not isolated but part of the broader strong-dollar cycle.

The relative weakness of the AUD stems from multiple factors. First, the interest rate differential between the US and Australia has narrowed. Although the Reserve Bank of Australia (RBA) recently kept rates steady at 3.6%, market expectations for future rate cuts persist. Meanwhile, the Federal Reserve faces policy adjustment pressures amid global trade uncertainties. This narrowing interest rate gap reduces the AUD’s appeal as a high-yield currency.

Second, worsening global trade conditions have directly impacted Australia’s outlook as a commodity exporter. In Q4 2024, the AUD/USD fell approximately 9.2% year-over-year, and in early 2025, it dropped to a five-year low of 0.5933, reflecting market pessimism about Australia’s prospects. Although there was a rebound in late 2025 driven by rising iron ore and gold prices—peaking at 0.6636 in September—the sustainability of this rebound remains uncertain.

Third, Australia’s domestic economic growth has slowed. In Q3, CPI rose 1.3% month-over-month, exceeding market expectations, which challenged the RBA’s inflation control efforts. Under the dual pressures of sluggish growth and persistent inflation, the relative attractiveness of Australian assets has declined, leading to continued capital outflows.

Three Key Drivers of the AUD/CNY Exchange Rate

Understanding the AUD/CNY exchange rate trend requires focusing on three core variables:

1. RBA Policy Stance and Economic Data

In November 2025, the RBA maintained its hold on interest rates, signaling caution. If upcoming inflation data continues to exceed expectations, the RBA may keep rates steady or consider hikes for an extended period. This hawkish stance could support the AUD in the short term and push the AUD/CNY higher. Conversely, deteriorating economic data might trigger rate cuts, weakening the AUD.

2. Federal Reserve Policy and US Dollar Strength

In 2025, the Fed cut rates twice, with the federal funds rate now between 3.75% and 4.00%. Market expectations about future policy shifts directly influence the USD. A strong dollar tends to weaken the AUD, as they move inversely. After bottoming near 96 in the summer, the USD index has rebounded about 3%, with a breakout above 100 increasing. Under a strong USD environment, the AUD/CNY exchange rate’s support is limited.

3. China’s Economic Recovery and Raw Material Demand

This is the most decisive factor. China is Australia’s largest buyer of iron ore, coal, and LNG. When China’s economy recovers strongly and its property market stabilizes, demand for raw materials remains robust, boosting resource prices and supporting the AUD. Conversely, if China’s growth slows and the property sector remains weak, raw material demand will soften, removing a key support for the AUD. Persistent economic weakness in China throughout 2025 has exerted long-term pressure on the AUD.

The People’s Bank of China’s (PBOC) RMB policy is also crucial. Recently, the RMB has remained relatively stable, but any shifts in China-US trade relations or exchange rate policies will directly impact the AUD/CNY rate.

Forecasts for Major Currency Pairs

AUD/USD Outlook

Based on late 2025 conditions, the AUD/USD is expected to trade within 0.64–0.66. Early 2026 factors include:

• RBA policy expectations and inflation trends—if inflation remains above target, the AUD may find short-term support; if economic data worsen, rate cut expectations will rise, pressuring the AUD downward.

• US economic performance and Fed signals—US GDP and non-farm payrolls directly influence USD strength. If the US economy proves resilient, the Fed may delay rate cuts, strengthening the dollar and pressuring the AUD toward 0.63 or lower.

• Global trade tensions and geopolitical risks—these affect risk appetite and the AUD’s performance as a commodity currency.

In the short term, expect AUD/USD to fluctuate between 0.63 and 0.66, with key technical levels at resistance around 0.6450 and support near 0.6373.

AUD/CNY Outlook

This is the most closely watched pair. Its movement generally follows the AUD/USD trend but with slightly smaller fluctuations due to RMB’s relative stability. Recently, the AUD/CNY has been in the 4.6–4.75 range. Influencing factors include:

• Trade relations between China and Australia—if trade policies stabilize and China’s resource demand remains strong, the AUD/CNY could gradually appreciate.

• RMB policy stance—PBOC’s willingness to stabilize the RMB and US-China exchange rate dynamics will influence the pair’s level.

• Australia’s economic fundamentals—domestic inflation, employment, and consumption data ultimately drive the AUD’s internal strength.

If China’s economy faces pressures or external shocks, the RMB may weaken, pushing the AUD/CNY higher toward 4.8. Conversely, further economic deterioration and reduced raw material demand could cause the pair to decline.

AUD/MYR (Malaysian Ringgit) Outlook

The MYR, also a commodity-sensitive currency, correlates strongly with bulk commodity prices. The AUD/MYR is expected to trade between 3.0 and 3.15. If Australia’s economic data deteriorates further or global uncertainty rises, the pair could test support near 3.0.

Institutional Views on the AUD Exchange Rate

Major institutions show divergent outlooks:

• Morgan Stanley remains relatively optimistic, projecting AUD/USD toward 0.72, supported by hawkish RBA signals and rising commodity prices.

• UBS adopts a more cautious stance, noting Australia’s resilience but highlighting global trade uncertainties and Fed policy risks that could limit gains, with year-end levels around 0.68.

• CBA economists are more conservative, expecting only a short-lived rebound, with downward pressure from a strengthening USD.

These differing views underscore the high uncertainty surrounding the AUD’s trajectory, emphasizing the importance of monitoring policy signals and economic data.

Strategies for Investing in the AUD

Short-term (1–3 days)

The AUD/USD is in a technical consolidation phase. Range trading is advisable. Resistance at 0.6450, with a breakout above favoring long positions toward 0.6500. Support at 0.6373, with a break below suggesting short-term shorts targeting around 0.63.

Key triggers include US GDP, non-farm payrolls, and Australian CPI. Reduce positions ahead of major data releases to avoid volatility.

Medium-term (1–3 weeks)

The trend depends on the balance between RBA and Fed policies. If US employment weakens and inflation drops, the Fed may cut rates, boosting risk sentiment and supporting the AUD toward 0.6550–0.6600. Conversely, resilient US growth and persistent high rates could push the AUD lower toward the year’s lows.

Long-term

For investors bullish on the AUD, current lows may present accumulation opportunities. Australia’s stable democracy and solid economic fundamentals support long-term growth, especially if global trade improves and China’s growth resumes. The AUD’s long-term outlook is also tied to China-Australia trade and relative monetary policies. As RMB internationalization advances, trading activity increases, offering arbitrage and hedging opportunities.

Summary and Outlook

The AUD is at a crossroads of technical and fundamental factors. Its future depends on multiple variables: RBA and Fed policies, commodity prices, and China’s economic health. In the short term, the AUD faces headwinds from a strong USD and global trade uncertainties. However, in the medium to long term, a Chinese economic rebound and stable global trade could lead to a bottoming and eventual recovery of the AUD.

Investors should closely monitor policy signals from the RBA and Fed, global commodity prices, and Chinese economic indicators. Employ technical analysis and risk management for short-term trades, and base longer-term positions on fundamental trends. All currency investments carry risks; prudent risk assessment and flexible strategies are essential.