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Westpac Still Look For AUD/USD To Move Higher During Remainder Of '21

AUD

Westpac note that "despite the U.S. dollar surge following the June FOMC meeting, our base case remains for the Aussie to trend higher multi-month, to $0.80 by end-Q3 and $0.82 by year-end. Australia has printed 40 consecutive monthly trade surpluses and a record 8 consecutive quarters of current account surpluses. A$ should benefit from anticipation of synchronised global recovery over 2021. However, A$ has been the weakest G10 currency so far in Q2, reflecting the RBA's aggressive balance sheet expansion and perhaps also investor anticipation of China-related headwinds for Australian exports and FDI. Australia's sluggish vaccine rollout also puts a limit on the breadth of economic recovery from the pandemic, and the RBA has committed to some form of QE extension at the July meeting. Balance of A$ risks near term is to the downside, but trade below $0.75 should attract substantial demand."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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