Overview

The Australian Dollar (AUD) has strengthened into mid-February as markets reprice the outlook for Australian interest rates. A firmer, more hawkish tone from the Reserve Bank of Australia (RBA) has led investors to reassess how long policy may need to stay restrictive, and whether further tightening could be required, to bring inflation back toward target. That shift in rate expectations has been a key support for the AUD, particularly against currencies where policy outlooks appear steadier or more dependent on incoming data.

Outside of the RBA narrative, the broader backdrop has also helped. Softer US dollar momentum at times, especially into major US data releases, has given cyclical currencies like the AUD additional breathing room. The near-term bias for AUD has improved, but follow-through will likely depend on inflation and labour market outcomes reinforcing the RBA’s view that underlying price pressures remain too elevated.

USD/AUD

AUD gains have been most visible against the US dollar. With AUD/USD around 0.709 on 11 Feb 2026, the inverse rate places USD/AUD near 1.41. That keeps USD/AUD pressing toward the August 2022 low near 1.4031, a level back in focus as an important near-term support zone.

Key drivers include:

• RBA repricing: the RBA raised the cash rate to 3.85% on 3 Feb 2026, while continuing to stress inflation remains too high.

• Softer US dollar tone: broader USD weakness ahead of key US releases, particularly labour market data, has amplified moves in AUD pairs.

Year low (2026): 1.4118 (09 Feb 2026)

GBP/AUD

GBP/AUD is trading near 1.923 on 11 Feb 2026, leaving sterling softer against the AUD in the near term. At these levels, GBP/AUD is around its lowest point since July 2024, based on where the cross traded through that month, generally in the mid 1.95s to 1.98 range.

The cross continues to reflect relative rate expectations. AUD has been supported by the RBA’s renewed tightening bias, while UK drivers have been more data dependent and can be overshadowed when AUD is moving primarily on central bank repricing.

Year low (2026): 1.9285 (10 Feb 2026)

EUR/AUD

EUR/AUD is hovering around 1.6768 on 11 Feb 2026, with the euro easing back from last week’s highs. This places the pair at its lowest level since the February 2025 lows, when EUR/AUD bottomed around 1.6358.

EUR/AUD often tracks global risk sentiment alongside relative growth expectations. When AUD is supported by a hawkish RBA backdrop, it can pressure EUR/AUD unless euro area data or expectations for the European Central Bank shift decisively in favour of the euro.

Year low (2026): 1.6804 (09 Feb 2026)

Looking ahead

Key factors likely to shape the next move in the AUD include:

• RBA policy outlook and further hike expectations: inflation and labour market data will remain central as markets reassess the probability of additional tightening later in the year.

• US economic data, especially employment figures: stronger results can revive USD support and cap AUD gains, while weaker prints can have the opposite effect.

• China and commodities: the AUD remains sensitive to China-related growth signals and bulk commodity demand, both of which can quickly shift risk appetite across AUD crosses.