Why did AUD fluctuate in 2022?

In 2022, there was a fluctuation in the price of AUD, with ongoing global crises affecting the market significantly. The RBA said that Australia had a floating exchange rate, “meaning the movements in the Australian dollar exchange rate are determined by the demand for, and supply of, Australian dollars in the foreign exchange market”.

How will the Aud perform in the future?

It's extremely difficult to predict how any currency pair will perform in the future. Inflation, interest rate hikes and the threat of a recession all have the potential to impact currency values here and overseas, while economic developments in China can also have a significant effect on the AUD's performance.

What drives the Australian AUD's performance in 2023?

As mentioned, the key drivers for the AUD's performance are interest rates and inflation data. Although the RBA’s monetary policies were overshadowed by the ultra-aggressive US Fed and global recession concerns in 2022, the duration of the current Australian rate hike cycle will be critical for the AUD forecast for 2023 and beyond.

How does the Aud compare to the US dollar?

While the value of the AUD is typically measured against the US dollar (USD) – which is the world's principal reserve currency – the AUD’s value actually moves differently depending on the currency. For example, in 2022, the AUD lost 7 per cent against the USD but gained 7 per cent against Japan’s Yen, as shown in the graph.