AUD/USD to plunge towards the 0.70 mark in the near-term – Westpac
|The aussie this month printed lows since November 2020. While the US dollar has been broadly strong, AUD is weakest in the G10. Economists at Westpac still see an eventual move down towards 0.70 before the coming dividend conversion season in September starts to slow the pace of decline.
See – AUD/USD: Downtrend at 0.7311 to cap the recovery – Commerzbank
Year-end target still at 0.78
“Aussie underperformance is to be expected when risk aversion picks up, but Australia’s covid lockdowns have also weighed, with Q3 GDP likely to show a steep contraction. The $80 tumble in iron ore prices in just a month has not helped, a reminder that a less robust trade position lies ahead.”
“Near-term risks are for a test of 0.70 if the USD remains solid. But by late Q3 and early Q4 the aussie should be finding support from the conversion of historically immense mining dividends, AUD18 B or more.”
“By October Australia’s catch-up on vaccination should be starting to result in eased restrictions and thus scope for the economy to rebound. The AUD/USD pair should recover to around 0.75 at this stage, with our year-end target still 0.78.”
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