AUD/USD to advance to 0.78 by end-March – Westpac

The aussie slipped about 2 cents into early February as commodity prices faltered and equity volatility rose but it has recovered close to its strongest levels since March 2018. Economists at Westpac stick to the view of a period of consolidation near-term with the next upside target at the 0.7780 mark.

Key quotes

“AUD/USD is probing higher, 0.7780 the next target.”

“Since the US dollar typically underperforms in global economic upswings, dips in AUD/USD should be shallow. However, there are some brakes on further gains near-term, including upward pressure on US Treasury yields following the Democrats’ recapturing of Senate control, the RBA’s haste to announce another AUD100 B QE program, ongoing pain for Australia’s tourism and education exports, and tensions with China which will hurt both investment and exports.” 

“Our end-March forecast is 0.78.”