FXA Invesco CurrencyShares Australian Dollar Trust : Bullish and Bearish Analyst Opinions

The RBA is expected to turn hawkish and hike rates at least twice due to inflation risks from the Iran conflict, which should strengthen the Australian dollar.

The Aussie dollar you're right, with energy, with mining capabilities of Australia, that does subtly seem to be the only FX diversification trade currently. While the USD is the primary haven, investors seeking FX diversification away from the dollar can look to the Australian Dollar. Australia's status as a net energy and commodities exporter means its currency fundamentally benefits from elevated global resource prices. LONG FXA as a commodity-backed currency play that hedges against Middle East energy disruptions. A broader Asian economic slowdown, particularly in China, caused by high oil prices could severely reduce demand for Australian exports.

While the market prices Fed cuts, Auld argues the Reserve Bank of Australia (RBA) is "not done yet" and predicts they will hike rates again in May 2026 because "inflation [is] sticking at that higher end." Monetary policy divergence. If the US holds or cuts rates while Australia hikes, the yield differential widens in favor of the Aussie Dollar (AUD). LONG AUD vs. USD. A global hard landing crashing commodity prices (which AUD is sensitive to).

"For example, Australia and the UK, they had a 10% rate. They are now getting a essentially 50% increase, up to 15%." US allies who previously negotiated preferential lower rates (10%) are losing that status. Their cost to export to the US just jumped 50%, which is a headwind for their equities and currencies compared to the previous status quo. Short UK and Australian equities/currencies as they lose trade privileges. The 150-day limit suggests this might be a negotiation tactic; if exemptions are quickly re-established, the trade reverses.