What's in store for the Aussie dollar in 2026?

Despite the growing global instability throwing a major X factor into economies worldwide, some forecasters have hopes for the Aussie dollar going further into 2026.

The dollar experienced its first bounce in four years against the US dollar last year, rising from a low of US59.22c to end above US67c.

"The Aussie typically does well against most currencies when the world economy is in a cyclical upswing," Commonwealth Bank head of FX international and geo-conomics Joseph Capurso said.

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"And you've seen that at a very extreme level this past year, with the Aussie dollar against the Japanese yen and Aussie-Euro, and the Aussie-Sterling up a bit as well."

Some analysts have said the dollar could rise to US73c in 2026.

"This past year we talked about US tariffs but in 2026 we're going to be talking about US tax cuts," Capurso said.

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"Those tax cuts are going to support the US economy, at least for 2026 and probably next year, and will offset some of the negatives from the big increase in tariffs we and global economies have had to absorb."

The CBA said interest rate differences between Australia and the world would factor into the dollar's movements.

The Reserve Bank of Australia paused rate cuts last year after August, due to resistant inflation, just as the US Federal Reserve indicated it could start cutting rates.

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This could weigh on demand for the US dollar.

And the CBA said interest rate disparities were likely to support the Aussie dollar against the UK pound and the euro.

"The outlook for the Australian economy is positive, and despite 2025's unwanted inflation surprises, jobs figures often beat expectations and indicated a labour market at or near full employment," the CBA concluded.

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