Australian Dollar Prediction: Goldman Sees Gains Over Twelve Months
Goldman Sachs expects the Australian Dollar to gain against the US Dollar, with the latest RBA signals supporting demand before Thursday’s jobs data.
Australia’s employment report will test whether a central bank already willing to raise rates again has reason to act, as Goldman Sachs projects AUD/USD at 0.74 in twelve months.
That forecast points to gains over the coming year, around October 2027, rather than an immediate response to Thursday’s figures.
The nearer projection is 0.72 in three months, placing the first stage of Goldman’s recovery around January 2027.
An encouraging domestic policy signal has already arrived: the Reserve Bank of Australia’s minutes, released on Tuesday, showed concern that weakness in the currency could make inflation harder to control.
Euro to Australian Dollar (EUR/AUD): 1.600005 (-0.24%)
The September labour-market release is due on 15 October at 11.30am AEDT, or 1.30am British Summer Time.
It follows a firmer US core-inflation result on Wednesday, adding a reminder that Australian interest rates alone cannot determine the exchange rate against the Dollar.
The RBA is watching the currency
MUFG senior currency analyst Lee Hardman says: “The minutes reinforced the message from the policy meeting that the RBA is prepared to hike rates further if required even though they have already lifted the policy rate by 100bps this year.”
The cash rate stands at 4.60% following September’s quarter-point increase.
Hardman adds: “It is currently the highest policy rate amongst G10 central banks which helped the Australian dollar to outperform in 2026 alongside the Norwegian krone.”
High Australian rates have supported the currency, but that advantage can narrow when other central banks tighten too.
JPMorgan’s currency desk says of the RBA’s September minutes: “The minutes were hawkish, but what was very interesting to me was the discussion around the currency, with the board noting that rising global r* is not fully reflected in Australian rates, creating potential downward pressure on the currency.”
Depreciation raises the Australian-dollar cost of imports, complicating efforts to bring inflation back to target.
Hardman says: “RBA officials displayed concern that the Australian dollar could weaken going forward if overseas central banks played catch up by increasingly moving to raise rates which could add to upside risks in Australia.”
JPMorgan’s desk says: “For a central bank still primarily focused on inflation, a weaker currency risks importing inflation and loosening conditions at the margin.”
It nevertheless distinguishes opposition to unnecessary weakness from an attempt to engineer a stronger exchange rate.
“As our economist Ben Jarman notes, this appears more a defensive stance against unwarranted AUD weakness than a desire for appreciation, (TWI is somewhat above the range of estimates of its longer run equilibrium level) but it nevertheless suggests the RBA may be less tolerant of currency-driven inflation risks than previously assumed.”
The trade-weighted measure in that assessment compares the Aussie with a basket of trading partners’ currencies.
An AUD/USD recovery can therefore coexist with a central bank that considers the currency relatively expensive on a broader basis.
Commodity support meets a weaker household economy
The domestic interest-rate story is reinforced by Australia’s exposure to commodity exports, according to MUFG.
“The outperformance of the Australian dollar also reflects the resilience of the global growth to the energy price shock.” Hardman says.
“Tighter supplies and resilient demand have contributed to Bloomberg’s commodity price index trading close to year-to-date highs having increased by just over 30% so far this year.”
Higher export prices can improve Australia’s terms of trade, supporting income even as expensive energy strains consumers elsewhere.
That support depends partly on demand remaining resilient: a severe global slowdown could reduce the benefit of high commodity prices while weakening appetite for the Australian Dollar.
Hardman notes: “The IMF stated that the global economy is again proving resilient but warned that growth is uneven with rapidly narrowing margins of adjustment in the near-term.”
At home, the constraint is more immediate.
Higher borrowing costs are already weighing on the housing market, creating a reason for policymakers to pause even while they remain uncomfortable with inflation.
Hardman says: “The RBA also noted that they were also wary of the risk that falling house prices could have a larger effect on household spending than assumed which could strength the case for keeping rates on hold in Australia.”
Our earlier analysis of the Aussie’s reduced rate support described the tension between deteriorating consumer confidence and persistent inflation.
The minutes have since clarified the RBA’s willingness to tighten, but Thursday’s jobs data will help establish how much restraint the economy can absorb.
A resilient labour market would leave policymakers more room to respond to inflation, whereas signs of weakening demand for workers would strengthen the argument for waiting despite concerns about the currency.
AUD/USD exchange rate FAQ
When does Goldman Sachs expect AUD/USD to reach 0.74?
Its latest twelve-month forecast points to around October 2027.
When are Australia’s jobs figures released?
The September report is due on 15 October at 11.30am AEDT, equivalent to 1.30am BST.
Why is the RBA concerned about a weaker Australian Dollar?
Currency depreciation can increase import costs and make inflation harder to contain.
