AUD/USD to hit fresh 2021 lows in the 0.72 region – Westpac
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The aussie has lost more than 4% against a resurgent US dollar since the June FOMC meeting, underperforming most of the G10. The sharp break below the 0.7400 area signals further losses ahead, with the 0.7250 zone in its sights during the week ahead, as reported by Westpac.
The risks of an extension down towards 0.7200 are increasing
“The RBA’s heavily caveated tightening announcement in July left the A$ yield outlook unattractive as the US economy validated the Fed’s hawkish shift, the RBNZ announced a sudden end to QE and the Bank of Canada continued tapering.”
“Australia’s covid lockdowns are depressing Q3 GDP estimates and with low vaccination coverage, renewed outbreaks will threaten the economy for some time.”
“Near-term risks are for fresh 2021 lows in the 0.72-0.73 region. But we see AUD/USD recovering to 0.75 by end-Sep, backed by a domestic economy that recovered from pandemic job losses well ahead of other countries and a historically strong external position: 41 consecutive monthly trade surpluses and a record 8 consecutive quarters of current account surpluses.”
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