AUD in a bind with EM likely to weigh further – ANZ

ANZ Research sees limited upside for AUD and fellow commodity FX in the near-term.

“We think challenges in emerging markets -in terms of China’s
asset-market volatility and growth -are likely to continue to weigh on
sentiment amid deleveraging and sectoral adjustments. Despite being
above trend, we expect growth momentum in developed markets to be mixed,
with US growth vulnerable given relatively low vaccination rates,” ANZ
notes. 

“On net, the muted growth impulse, alongside modestly tighter
liquidity is likely to leave the AUD and its fellow commodity
currencies in a bind for some time,” ANZ adds.

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