(24 April 2026 – Australia) Australian enterprises are demonstrating high rates of hedging as they seek to manage business and investment risks amid elevated uncertainty, according to the inaugural CommBank FX Barometer.
Drawing on newly launched quarterly research conducted by East & Partners based on direct interviews of 1,000 Australian-based corporates and superannuation funds exposed to foreign currency markets in their operations, the report provides insights into their forex expectations, exposures, and hedging behaviour.
The CommBank FX Barometer found that super funds expect the Australian dollar to trade near $US0.71 by year-end, while corporates are slightly more optimistic, forecasting it to finish closer to $US0.72. The April CommBank FX Barometer research was conducted between 16 February, prior to the start of the Iran war, and 10 April, shortly after a ceasefire was announced.
The data highlights elevated hedging activity by corporates, brought on by the uncertainty the conflict has provoked. The report shows importers are hedging around 80 per cent of their currency exposures. Exporters that hedge cover 86 per cent, indicating a selective approach to lock in dips in the Australian dollar amid heightened global uncertainty. By contrast, businesses that both import and export are hedging around two-thirds of exposures, reflecting partial natural offsets.
The CommBank FX Barometer also demonstrates clear differences in hedging behaviour by business size. Almost all large corporates with turnover above A$725m currently hedge their currency exposure, compared to 54 per cent of businesses with turnover of A$5m to A$20m.
Key takeaways include:
- Almost 80% of importers expect profits to fall from a 10% fall in AUS/USD. The average expected fall in profits in 6.8%. Over 85% of exporters expect profits to rise, by an average 7.9%
- The impact of a 10% drop in AUD/USD on capital spending plans is much smaller. Only 34% of importers would cut their capital spending, by an average of 8%. By contrast, just over half of exporters would increase their capital spending, by an average of 8%.
- Super funds hedge three-quarters or more of their foreign property and infrastructure assets.
- Super funds hedge less than one-third of their foreign private equity and hedge fund assets.
- Around half of foreign listed equities and two-thirds of foreign fixed income are hedged.
- Super funds expect the Australian dollar to trade close to 0.71 by the end of the year.
- Corporates are slightly more optimistic about the Australian dollar. Corporates expect the Australia dollar to end the year near 0.72.
- Exporters forecast the AUD/USD will end the year at around 0.71 compared to importers expectations of around 0.73.
“The findings highlight significant variation in the way super funds hedge foreign assets, with higher hedge ratios in core asset classes and lower coverage in alternatives. The CommBank FX Barometer shows significant variation in hedging ratios across super funds’ foreign assets. The core of these portfolios – listed equities and fixed income – have hedge ratios of around one-half and two-thirds, respectively” commented CommBank Head of FX, International & Geo-economics Joseph Capurso.
“By contrast, investments in private equity and hedge funds are much more exposed to currency moves, with hedge ratios below 30 percent. Looking ahead, almost 90 percent of super funds expect to increase their hedge ratios in the next three months. Hedge ratios are expected to rise across all asset classes, particularly private credit, private equity and hedge funds” Capurso added.
“The CommBank FX Barometer shows both corporates and super funds expect the Australian dollar to end the year near current levels, around 0.71 to 0.72. Nevertheless, Australian businesses may be caught out by a lower Australian dollar driven by ‘US exceptionalism’, including the artificial intelligence boom, as well as the Iran war. The stark differences in hedging suggest larger businesses are better protected than smaller businesses if the dollar falls” he said.
“The results highlight the importance of hedging currency risk to protect against market movements. The CommBank FX Barometer shows changes in AUD/USD can have a large impact on profits and capital spending plans, highlighting the important role of hedging currency risk to help protect against unfavourable moves in currencies” stated CommBank Economist and Currency Strategist Carol Kong.
“Large businesses hedge around 80 per cent of their currency exposures, while smaller businesses hedge around 53 per cent, highlighting the higher exposure of smaller businesses to unfavourable currency movements,” Kong added.
Read the full report here: CommBank FX Barometer.
