The Australian dollar could climb further against the US dollar, analysts say, even as speculative bullish bets on the currency remain near eight-year highs. Barrenjoey Markets expects the Aussie to reach 75 US cents, while ANZ forecasts it at 73 cents by year-end. The currency has already risen over 5% this year to around 70.6 cents.

Leveraged fund holdings are at their highest since October 2017, and asset managers are the most bullish since October 2024, according to Commodity Futures Trading Commission data. The Reserve Bank of Australia's aggressive rate-hiking stance has attracted investors, with swap markets pricing in 40 basis points of further tightening in 2026. This policy divergence with the Federal Reserve has pushed Australia's 10-year bond yields more than 60 basis points above Treasuries.

The Aussie rose to a two-week high on February 25 after faster-than-expected inflation data bolstered expectations for additional rate hikes. However, strategists caution that with significant RBA tightening already priced in, the currency needs strong economic data to break through key resistance levels. While the RBA's hawkish stance supports the Aussie, analysts warn that market positioning could become a headwind, and the currency may struggle to sustainably hold above 75 cents.