The Australian dollar has fallen over 35% in ten years, with the strong dollar cycle still being the main reason
The Australian dollar is the fifth-largest traded currency globally (after the US dollar, euro, Japanese yen, and British pound), and the AUD/USD currency pair ranks among the top five most actively traded pairs worldwide. Its liquidity and low spreads attract many investors for short-term or medium-to-long-term positioning. However, despite the AUD traditionally being viewed as a high-yield currency and a primary target for carry trades, its overall performance over the past decade has been quite disappointing.
From an initial level of 1.05 in early 2013 to the end of 2023, the Australian dollar against the US dollar has declined by over 35%, while the US dollar index (DXY) has risen by 28.35%. Notably, other major currencies such as the euro, Japanese yen, and Canadian dollar have also depreciated against the dollar, reflecting a comprehensive strong dollar cycle underway. Against this backdrop, the weak performance of the Australian dollar becomes even more apparent—