Goldman Sachs raises Australian dollar forecast as RBA turns hawkish

Goldman Sachs raised its Australian dollar forecast in Sydney on June 15, 2023, following the Reserve Bank of Australia's unexpected shift toward a hawkish monetary policy stance. The global investment bank now predicts the AUD will reach 0.75 against the US dollar by the end of 2023, up from its previous forecast of 0.72, citing stronger-than-expected economic data and the RBA's commitment to controlling inflation. This revision comes after the central bank maintained its tightening stance, signaling further potential interest rate increases if inflation remains persistent. The Australian dollar has responded positively to these developments, gaining approximately 2.5% against the greenback over the past month as markets price in the likelihood of higher interest rates. Analysts suggest that the combination of Australia's robust commodity exports, particularly iron ore and coal, coupled with the RBA's inflation-fighting measures, could support the currency's value against its US counterpart in the coming quarters.