Australian Dollar to Chinese Yuan Exchange Rate Forecast: Interpreting Trading Opportunities Amid China-Australia Economic Linkages

The Australian dollar ranks fifth in global forex trading activity, but few people analyze the AUD/CNY currency pair in depth. In fact, forecasting the AUD/CNY exchange rate is especially important for investors who pay attention to both the Australian economy and the Chinese market. This is because Australia’s economy is highly dependent on exports of commodities like iron ore, coal, and copper, and China is the largest buyer of these goods. Therefore, the performance of AUD/CNY often reflects the deep economic interactions between China and Australia.

Why is the AUD called a “commodity currency”? What makes its relationship with the Chinese yuan unique?

Australia is one of the world’s leading exporters of mineral resources, with strategic commodities like iron ore, coal, and liquefied natural gas accounting for over 50% of total exports. Because of this, the AUD is widely regarded as a “commodity currency”—its exchange rate closely linked to global commodity prices.

Over the past decade, the AUD has performed relatively weakly. Starting from around 1.05 in early 2013, the AUD/USD has depreciated by over 35% in ten years. During the same period, the US dollar index rose by 28.35%, while major currencies like the euro, yen, and Canadian dollar also depreciated against the dollar. This reflects a “strong dollar cycle” globally, during which the AUD, as a high-risk, commodity-linked currency, has been relatively weak.

However, the story of AUD/CNY is different. China, as Australia’s largest consumer of its commodities, has a unique linkage with Australia’s economic cycle. When China’s economy is doing well, demand for Australian minerals increases, directly boosting the AUD’s performance against the yuan. Conversely, when China’s growth slows or its property market cools, this demand weakens, and AUD/CNY may face downward pressure.

The three core drivers of AUD/CNY exchange rate forecasts

1. China-Australia trade relations and commodity price fluctuations

Australia’s reliance on exports to China is very high. In recent years, over 60% of Australia’s iron ore exports go to China, and more than 50% of its coal exports are destined for the Chinese market. This means that the AUD/CNY trend essentially reflects the question: “How much does China need Australian minerals?”

In Q4 2024, the AUD/USD rate sharply declined, with a full-year drop of about 9.2%. Entering 2025, although global trade tensions once pushed the AUD/USD down to a five-year low of 0.5933, starting mid-year, a significant rise in iron ore and gold prices provided strong support for the AUD. When iron ore prices rebound from lows, AUD/CNY often strengthens accordingly.

2. RMB policies and China’s economic fundamentals

Changes in RMB policy directly impact AUD/CNY. The People’s Bank of China’s liquidity injections, interest rate adjustments, and exchange rate management stance all significantly influence this currency pair.

In Q3 2025, China’s CPI showed weakness, and slowing economic growth raised market concerns. Meanwhile, the persistent downturn in China’s real estate market further dampened long-term demand expectations for Australian imports. Under these conditions, the RMB faces depreciation pressure, but this does not necessarily mean AUD/CNY will rise sharply—since Australia’s economy is also slowing, putting pressure on the AUD.

Notably, although China’s official service PMI in October indicated pressure, subsequent trade policy adjustments eased RMB depreciation concerns. This suggests policy changes could create trading opportunities for AUD/CNY.

3. RBA policies and interest rate differentials

The Reserve Bank of Australia (RBA) maintained interest rates at 3.6% in November 2025, signaling a cautious stance. Inflation data exceeded expectations (Q3 CPI rose 1.3% quarter-on-quarter), causing the RBA to hold back on further rate cuts. This policy stance provides support for the AUD.

In contrast, China’s central bank has maintained a relatively accommodative stance amid slowing growth. This policy divergence could widen the interest rate differential, favoring the AUD’s appreciation. However, whether this advantage can be sustained depends on future policy directions from both central banks.

Analyzing AUD/CNY trends: multiple dimensions for trading opportunities

Short-term forecast (1-3 months)

Based on current technical and fundamental analysis, AUD/CNY is expected to fluctuate between 4.60 and 4.75. Key influencing factors include:

Positive factors supporting the AUD:

• RBA remains cautious and hawkish, unlikely to cut rates rapidly
• Commodity prices, especially iron ore, stay relatively high
• Australian employment data remains resilient

Factors suppressing the AUD:

• China’s economic slowdown may further reduce demand for Australian commodities
• Rising global trade uncertainties and volatility in risk assets
• Weak domestic consumption in Australia, slowing economic growth

If the RMB weakens due to domestic economic pressures, AUD/CNY could briefly rise toward 4.80. Conversely, if China implements strong stimulus measures, AUD/CNY might test support at 4.55.

Medium-term outlook (1-3 weeks)

Bullish scenario for AUD/CNY:

Clear signs of China’s economic recovery, especially with increased support for the property market and improved consumption data, could boost demand for Australian minerals. In this case, AUD/CNY might rise to 4.85–4.95. Additionally, if the Fed continues to cut rates, global risk sentiment could improve, benefiting high-risk currencies like the AUD.

Bearish scenario for AUD/CNY:

If China’s economy remains weak, with export/import data below expectations and continued pressure on the property sector, the PBOC may implement more easing measures, weakening the RMB. However, this RMB depreciation may not directly lift AUD, as Australia’s commodity demand would also be under pressure. In such a scenario, AUD/CNY could fall to 4.55–4.60.

Institutional views and market expectations

Different financial institutions have varying outlooks:

• Morgan Stanley, assuming the RBA maintains a hawkish stance and commodity prices stay high, projects AUD/USD could rise to 0.72 by end-2025. If realized, AUD/CNY could reach 4.85–4.90.

• UBS adopts a more conservative view, citing global trade uncertainties and Fed policy risks, expecting AUD/USD to stay around 0.68, implying AUD/CNY around 4.70–4.75.

• Commonwealth Bank of Australia (CBA) economists are cautious, expecting only a short-term rebound, with AUD/CNY potentially experiencing more volatility in the medium term, depending on China’s policy developments.

Relative performance of AUD/CNY against other major currencies

AUD/USD: the main player in the global strong dollar cycle

AUD/USD has been in a long-term strong dollar cycle, serving as a key reference for AUD/CNY. When the US dollar index (DXY) rebounds, AUD/USD tends to weaken. Currently, DXY has rebounded from around 96 in summer toward breaking above 100, increasing downward pressure on the AUD and affecting AUD/CNY.

AUD/MYR: regional commodity currency benchmark

The Malaysian ringgit (MYR) is also a commodity-related currency. AUD/MYR can serve as a reference. During periods of global uncertainty, AUD/MYR tends to fluctuate between 3.0 and 3.15. When Australian economic data shows further weakness, it may test support at 3.0, reflecting broader commodity currency pressures, which could also impact AUD/CNY.

Investment strategies and risk warnings for AUD/CNY

Short-term trading (1-3 days)

Long AUD/CNY when:

• Breaks above key resistance levels (e.g., 4.75), consider small long positions targeting 4.85
• Triggered by positive Chinese economic data (e.g., manufacturing PMI, property sales) or hawkish signals from the RBA

Short AUD/CNY when:

• Falls below support at 4.60, consider short positions targeting 4.50
• Triggered by weak Chinese export data, deteriorating Australian economic indicators, or global risk aversion

Medium-term holdings (1-3 weeks)

The trend depends on China’s economic recovery. If optimistic, consider building long positions gradually at lows, targeting 4.90–5.00. If cautious, avoid chasing high and maintain risk controls.

Long-term allocation

Long-term investors bullish on Australia’s commodity exports and China-Australia trade relations may consider accumulating AUD/CNY longs on dips, leveraging time to smooth short-term volatility. This requires strong fundamental support, especially signs of sustained Chinese economic recovery.

Risk warnings

AUD/CNY is volatile and subject to multiple risks:

• Policy risk: Sudden shifts in monetary policy by China or Australia can cause sharp swings
• Trade risk: Escalation of global trade tensions may hurt Australian exports
• Economic risk: Prolonged Chinese economic weakness can reduce demand for Australian minerals
• Geopolitical risk: Changes in China-Australia political relations could impact trade flows

Investors can trade AUD/CNY via forex margin products, which typically offer long/short options and leverage (often 1-100x). While these can amplify gains, they also carry high risk of loss, including total capital. Use caution, combine multiple market signals, and strictly follow risk management rules.

Summary: Key points for AUD/CNY forecast

The AUD/CNY exchange rate reflects the deep economic interaction between China and Australia. In the short term, expect it to fluctuate between 4.60 and 4.75, with the medium to long-term trend depending on China’s economic recovery, commodity prices, and policy divergence. Investors should closely monitor China’s CPI, property policies, Australian employment data, and global commodity prices, adjusting strategies flexibly. Regardless of approach, risk management should be prioritized to avoid over-leverage and maintain disciplined trading.