A weak US dollar combined with positive news regarding a vaccine have supported AUD/USD, but there may be hurdles to overcome, warn analysts at Rabobank. They point out bad news regarding the pandemic, policy push backs from the Reserva Bank of Australia or a rise in China-related tension may stall the Australian dollar.
“It is not difficult to put together a bearish argument for the USD. Neither is it unreasonable tob assume that in a ‘risk-on’ environment AUD/USD should be trending higher. However, there are a reasons to suspect that a great deal of caution should be exercised when considering upside potential for AUD/USD. These concern the risk that there may be too much positive vaccine news in the price, the actions of the RBA and the impact on Australian exports resulting from tensions with China.”
“We see scope for pullbacks in AUD/USD in the coming months. We are forecasting a dip to 0.72 in 3 months and a recovery to 0.75 on a 12 month view.”
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