On Friday, AUD/USD dove back below the 0.700 level. Economists at Rabobank continue to see scope for AUD/USD to strengthen to 0.72 towards the back half of this year.
AUD/USD to trade mostly in the 0.69-0.70 area on a three-month view
“An as expected 25 bps rate hike from the RBA this week, should not in itself create much of a reaction from the AUD. However, any rhetoric which pushes back against the risk of a forthcoming policy pause should lend support.”
We expect AUD/USD to trade mostly in the 0.69-0.70 area on a three-month view as the market assesses the policy outlook of both the Fed and the RBA.”
“We look for a move to AUD/USD 0.72 in the latter half of the year assuming China’s economic recovery remains on track.”
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The AUD/USD has recently been bolstered by increasing optimism in the Australian economy and is expected to continue its upward trend towards 0.72 according to an outlook report by Rabobank.
The recent developments in Australia have been largely positive, as the country continues to make progress in controlling the pandemic. This, in turn, has enabled the Australian economy to restart and pick up pace, lowering the expectations of further stimulus given the improved economic outlook. This improved outlook has seen the USD/AUD exchange rate strengthen against the USD, and is expected to continue strengthening in the latter half of the year.
Rabobank has recently made a statement about the perceived direction of the AUD/USD exchange rate. The bank expects the exchange rate to continue to rise in the latter half of the year, with a strong outlook for the AUD against the USD in the second half of 2021. The Rabobank report goes on to state that the AUD/USD has the potential to reach 0.72 by the end of the year, if the Australian economy remains on its current trajectory.
This outlook positively affects investors who are looking to invest in AUD. At its current position, investors are able to access large returns while at the same time, reducing exposure to currency risk. Furthermore, investors have access to a growing number of products which allow them to gain exposure to the AUD while also gaining access to other asset classes.
In conclusion, the AUD/USD exchange rate is expected to continue rising in the latter half of the year, with Rabobank expecting it to reach 0.72 by year’s end. This should be positive news for investors who are looking to gain exposure to the AUD, as it allows for larger returns on investments without the additional risk of exposure to currency fluctuations.
