AUD/USD to benefit from dollar’s slide after Q1 – CitiBank

Analysts at Citibank consider that the US Dollar Index (DXY) can potentially drop a further 4 – 5% in 2021 to the 85.50 – 86.50 level. They warn the bulk of the DXY decline is likely to take place over 6 months from end Q1 – end Q3, which may support the Australian dollar. They forecast AUD/USD at 0.78 in a three month period, and at 0.81 in a six to twelve-month horizon. 

Key Quotes:

“The dollar drifted lower after Federal Reserve Chair Jerome Powell struck a dovish tone, saying the economy remained far from the Fed’s goals and he saw no reason to alter its highly accommodative stance “until the job is well and truly done. The headline was supportive to AUD.”

“Through 2021, AUD should continue to trade high beta to riskon/global growth developments. The expected wide scale rollout of a vaccine, our expectations for a reflationary 2021 and associated weaker dollar, therefore implies AUD appreciation. Aussie should be additionally supported by the continued strong economic recovery in China, given the two countries trade links.”

“AUDUSD’s RSI retreated from overbought level but still stayed above the upward trendine, with the support at 0.7482—0.7516 range and resistance at 0.7820 and 0.8136.”

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

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD falls toward 1.19 after robust US Nonfarm Payrolls data

EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.


GBP/USD recovers after post-NFP dip below 1.38

GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.


XAU/USD battles 1700 level

Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News