Analysts at Credit Suisse expect a more challenging risk backdrop in 2022 due to higher real yields, which will weigh on high-beta currencies, particularly AUD/USD.
AUD/USD is likely to come under pressure
“A further boost to the USD is also expected if US Real Yields establish bases as we expect, however, this should lead to a broadening of the USD rally as the risk backdrop becomes challenged, with AUD/USD likely to come under growing pressure.”
“We see scope for a move back to 0.6758, which is the 50% retracement of the 2020/21 upmove and potentially beyond given the size of the top, with next minor support at 0.6505/00.”