AUD/USD to drop towards the 0.71 level by end-March – Westpac
|AUD/USD fell below 0.7200 and seems to be having a tough time staging a convincing rebound. In the opinion of economists at Westpac, the pair is at risk of declining into the 0.7100 level by end-March.
The Aussie’s headwinds have strengthened early in 2022
“US inflation at 7% and unemployment below 4% have reinforced the Fed’s tightening bias, with a March rate hike almost fully priced. This should provide solid support for the US dollar, helping cap AUD/USD rallies into the 0.73 area.”
“The 1 Feb RBA meeting is major event risk but Omicron has dampened Australia’s hoped-for summer economic revival, suggesting no hawkish turn.”
“The Aussie’s commodity price support is mostly still elevated, with large trade surpluses continuing. But China’s rate cut only adds to investor unease over its growth outlook.”
“Risks to the 0.70 handle multi-week, end-March forecast 0.71.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.