Headwinds to send AUD just a little lower in Q1 (analyst note)
Read full post at forexlive.com
An AUD/USD update via Westpac over the weekend, in summary.
Westpac note the positives that driven its rise:
- Rapid global equity gains following the US elections
- optimism over Covid-19 vaccines
- resurgent iron ore prices (9-year highs)
- Since the US dollar typically underperforms in global economic upswings, dips in AUD/USD should be shallow
Nevertheless the analysts at the bank see it capped into the end of Q1 with a forecast of 0.76 citing headwinds:
- upward pressure on US Treasury yields following the Democrats’ recapturing of Senate control
- RBA’s aggressive A$100bn QE program (with potential for more)
- ongoing pain for Australia’s tourism and education exports
- tensions with China which will hurt both investment and exports