Australian Dollar: Range-bound outlook near 0.70–0.71 against US Dollar

FXStreet Insights Team FXStreet

Rabobank’s Senior FX Strategist Jane Foley highlights that the Australian Dollar (AUD) has fallen from a top G10 performer to the bottom of recent rankings as growth momentum fades and USD strength weighs. The bank notes market expectations for one more Reserve Bank of Australia rate hike this year, but with the hiking cycle nearing its peak, it expects AUD/USD to trade broadly sideways around 0.70–0.71 over three months.

Australian Dollar seen losing some shine

"As anticipated, USD strength has pushed AUD/USD back to the 0.70 area."

"Signs that the Australian economy has lost momentum have also shaken the market’s conviction in the outlook for further tightening from the RBA."

"It is RaboResearch’s view that one more RBA rate hike is likely in August, with the outlook dependent on price pressures stemming from the closure of the Strait of Hormuz, notwithstanding the softer outlook for domestic economic activity."

"We anticipate range trading in the AUD/USD 0.70 to 0.71 area on a 3-month view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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