The case for some appreciation in the AUD this year remains strong – Scotiabank

FXStreet Insights Team FXStreet

AUD/USD ended the week just above 0.6500. Economists at Scotiabank analyze the pair’s outlook.

AUD outlook remains constructive

The Reserve Bank of Australia is reluctant to concede that the tightening cycle is over, suggesting that the policy rate will stay elevated for some time to come. Stimulus efforts in China may – eventually – lead to some sustained economic improvement in a key export market for Australia.

The AUD looks relatively ‘cheap’ among its major currency peers in broad terms and trades below our own short-term, fair value estimate currently.

Market sentiment remains bearish but aggressive short AUD positioning has eased somewhat from the peaks seen late last year.

AUD/USD – Q1-24 0.6600 Q2-24 0.6600 Q3-24 0.6800 Q4-24 0.6800

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FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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