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Westpac: U.S. Growth Outlook To See More Cautious Federal And Sluggish AUD/USD In 2024

AUD

Westpac note that “higher U.S. interest rates and stronger GDP growth are likely to support a slower descent for the USD and consequently further weakness in the AUD. From the current spot rate near $0.64, we now look for $0.66 at end-2023, $0.70 end-2024 and $0.73 end-2025.”

  • “Notably, not only is the starting point of this revised profile 2 cents weaker at December 2023, but also 4 cents lower at end-2024.”
  • “Through 2024 we had anticipated a 6 cent lift in AUD/USD, but under these new interest rate differentials (U.S. rate cuts 75bps less in 2024), the lift in the AUD associated with improving global economic conditions will be more constrained.”
  • “In particular, risks around China should abate assuming policy makers continue their recent push, but only as their actions prove effective. This will support the Australian dollar, particularly in the second half of 2024 and into 2025.”
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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