AUD/USD: RBA to flatten rate curve on appreciation above 0.70 – ANZ

Some weakness will bring opportunities to reset long trades in the AUD/USD pair at 0.65 while the Reserve Bank of Australia (RBA) will likely act if the aussie surges above 0.70, according to economists at ANZ Bank.

Key quotes

“The transmission clusters across Victoria in particular have challenged the growing expectation of a pronounced bounce back in the domestic economy. Instead, if we apply consumer uncertainty to the many industries hit by the pandemic and shutdowns, the growth path for Australia is more mixed.” 

“For the RBA, currency appreciation above 0.70, out of line with fundamentals, will likely draw policy considerations that would see the domestic rates curve flatten.” 

“For July, we think there is scope for tactical downside for the AUD given the negative news flow and stretched risk appetite. With global central bank support unlikely to waver, we see this as a buy-the-dip opportunity, particularly against the JPY and USD crosses. We think there will be opportunities to re-enter long positions at around USD0.65.”

“With the AUD having led the recovery, there remains scope for catchup appreciation across the Asian FX complex, which would see Asia/AUD modestly supported. Our year-end targets have lifted and anchored near fair-value of 0.70, representing the more balanced environment that the AUD now sits within.”


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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD bounces after upbeat COVID-19 cure news

EUR/USD is trading above 1.13, rebounding from the lows. Gilead reported that its drug Remdesevir substantially reduces mortality among COVID-19 patients. The news boosted stocks and weighed on the dollar. US coronavirus statistics are due out.


GBP/USD recaptures 1.26 as the market mood improves

GBP/USD is trading above 1.26 as the market mood improves and the safe-haven dollar retreats. Investors are shrugging off Brexit concerns and focusing on hopes to cure coronavirus. US COVID-19 statistics are due out.


XAU/USD consolidates daily gains above $1,800

After advancing to its highest level since September of 2011 at $1,818 on Wednesday, the XAU/USD pair staged a correction and briefly dropped below $1,800 on Thursday.

Gold News

Cryptocurrencies: War for dominance hit the bedrock of the market

Bitcoin tried to regain market share and activated sales in the Altcoin segment. BTC/USD, ETH/USD and XRP/USD are looking for supports and a rebound to push them to new elative highs. The current compression on the XRP/USD chart could trigger an exploding movement.

Read more

WTI once again breaks $40 per barrel after trading lower in early EU trade

There has been quite the bounce in WTI since the EU session after some strong selling pressure during Thursday and overnight. Once again on Friday's session, the price has taken the USD 40 per barrel handle. 

Oil News