ING
2026 FX Outlook
LIVE10 November 2025USD bearish
Back to CurrenciesVery Bullish
AUD/USD
The comeback kid - top G10 pick
ING Forecast Path
vs Prior ForecastCurrent target: 0.73Prior target: 0.69Revision: +5.8%
Cross-Firm Forecast Comparison
Key Drivers
RBA rate path
Iron ore and coal prices
China growth and stimulus
REER undervaluation
Pension fund flows
Credit cycle
All Firm Targets (Dec '26)
INGVery Bullish0.7300
DBBullish0.7200
MSBullish0.7100
GSBullish0.7000
MUFGBullish0.7000
BofABullish0.7000
BARCBullish0.6900
JPMBullish0.6800
Key Issues for 2026
1.RBA rates at 4.35% make AUD the highest-yielding G10 currency
2.Commodity prices (iron ore, coal, LNG) remain supportive
3.China stimulus spillover lifts Australian exports
4.AUD/USD at 0.64 is 15-20% undervalued on REER basis
5.Pension fund repatriation flows accelerating
6.Credit growth at post-GFC highs signals domestic strength
Risk Scenarios
Very bullish0.75-0.78
China stimulus exceeds expectations, commodity supercycle narrative
Base case0.71-0.73
RBA holds, China stabilizes, commodities supported, USD weakens
Moderately bearish0.65-0.67
RBA forced to cut, China disappoints, commodities soften
Most bearish0.58-0.60
Global recession, commodity crash, China hard landing
Analysis Summary
AUD is our top conviction G10 long for 2026. The combination of elevated RBA rates, strong commodity prices, improving China growth, and deeply undervalued levels make AUD the standout opportunity. We see AUD/USD reaching 0.73 by year-end, representing a 14% gain from spot.