VIEW: CBA note that "AUD/USD has.............>

AUSSIE: VIEW: CBA note that "AUD/USD has experienced a 'v-shaped' recovery.

AUD/USD is now at the lower end of our estimate of the 'fair value' range of

0.66-0.74. Commodity prices have long been the major medium-term driver of

AUD/USD. With the world economy in the early stages of a long recovery, led by

Chinese fiscal stimulus, the prospects for commodity currencies such as AUD/USD

have brightened. We expect AUD/USD to exceed its pre-coronavirus level of $0.70

before the end of '20 & lift to the mid-70s in '21. The Australian government's

huge fiscal stimulus means Australia's recession may be short-lived. By Q320, we

expect the debate in Australia to be about how to safely taper fiscal stimulus

without extending the recession. While we expect AUD/USD to lift in coming

months, AUD/USD will not increase in a straight line. The increasingly fraught

relations between US-China and Australia-China will be an intermittent downside

risk to AUD/USD. Some of these tensions reflect 'great power' rivalry between

the US and China that will not go away soon. Another downside risk to AUD/USD is

that Brazilian iron ore supply is not disrupted by the coronavirus as much as

markets currently fear."