UPDATE: The Australian dollar has just soared past the crucial 70 U.S. cent mark, marking a significant rally not seen since early 2023. This surge is igniting what analysts are dubbing the “Aussie Great Again” trade, reflecting a newfound investor confidence in Australia’s economic prospects.
This breakthrough occurred on January 26, 2026, as the AUD/USD pair breached 0.7000, driven by a dovish shift from the U.S. Federal Reserve and a hawkish stance from the Reserve Bank of Australia (RBA). The Australian dollar has appreciated nearly 7% since October 2025, signaling a pivotal moment for the currency.
“This is more than just a technical breakout,” stated Ghiles Guezout, FX strategist at FXStreet. “It reflects a fundamental re-rating of Australia’s macro outlook.” The resurgence is largely attributed to contrasting monetary policies between the RBA and the Fed. As the Fed hints at potential rate cuts due to slowing U.S. growth, the RBA has maintained its position, citing stubborn inflation and a robust labor market.
UBS analysts project the AUD/USD could reach 0.72 by mid-2026 if global risk appetite remains strong. The rally is further fueled by improving global sentiment, including a U.S.-China trade truce and a semiconductor deal between Taiwan and the U.S., which has alleviated geopolitical uncertainties.
“Risk-on conditions are back,” emphasized Emilia Terzon, business reporter at ABC News. “And the Aussie dollar is riding that wave.” As a major exporter of commodities, Australia stands to gain significantly from enhanced trade flows and regional stability.
Key exports such as iron ore, lithium, and liquefied natural gas (LNG) are experiencing strong demand, particularly from China, which is boosting the currency’s performance. “Resource-linked currencies like the Aussie tend to outperform when global growth expectations rise,” noted James O’Connor, senior analyst at Westpac.
Recent Australian economic indicators support this bullish sentiment, with forecasts suggesting GDP growth of 2.5% in 2026, surpassing previous estimates. As traders react swiftly, net long positions in the Aussie have surged, and demand for bullish AUD/USD contracts is on the rise.
“The sentiment shift is real,” declared McKenzie Tan, a currency strategist in Melbourne. “The Aussie is no longer seen as a laggard—it’s a leader.” Despite this optimism, analysts caution that risks remain. However, they assert the current rally is built on stronger foundations compared to previous spikes.
The stronger Australian dollar presents mixed implications for businesses and investors. The RBA is expected to keep a close eye on the currency, although direct intervention has historically been avoided. The phrase “Aussie Great Again” is gaining traction among traders, reflecting a renewed confidence in Australia’s economic power and relevance on the global stage.
As the AUD breaches 70 U.S. cents, the currency is back in the spotlight of global FX markets. The future trajectory will depend on central bank decisions, commodity trends, and evolving geopolitical landscapes. For now, the rally is capturing investor attention like never before.
