The Australian dollar looks like it is firmly back in the range again. Economists at Westpac expect the AUD/USD pair to advance nicely towards 0.80 by end-September and to 0.82 by the end of 2021.
Aussie to benefit from anticipation of synchronised global recovery
“Our base case remains for the Aussie to trend higher, to 0.80 by end-Q3 and 0.82 by year-end.”
“Australia has printed 40 consecutive monthly trade surpluses and a record 8 consecutive quarter of current account surpluses.”
“A$ should benefit from anticipation of synchronised global recovery over 2021. However, A$ is the weakest G10 currency over the past month, reflecting the RBA’s aggressive balance sheet expansion (QE exceeding the pace of debt issuance) and perhaps also investor anticipation of China-related headwinds for Australian exports and FDI beyond the current resources boom.”
“Australia’s sluggish vaccine rollout also puts a limit on the breadth of economic recovery from the pandemic.”
“Ranges may take some time to give way on the top side.”