AUD/USD to trade at 0.65 by year-end (ANZ)

Since mid-July, AUD/USD has declined by 6% from above 0.68 to 0.64, setting a year-to-date low of 0.6357 on September 6. Economists at ANZ Bank analyze Australia’s outlook.

Upside ahead

We think developments in China (and the RMB), along with the USD, are key drivers of the AUD in the near term.

We also expect commodity prices to have a larger impact on the AUD with rising energy prices. If these elevated energy prices are sustained, this will likely be supportive of Australia’s terms of trade and may dampen some of the negative impact of a resilient USD and a weak RMB.

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