According to Jinshi Data, Richard Franulovich, head of foreign exchange strategy at Westpac Bank in Sydney, said that due to the tough stance of the Reserve Bank of Australia and the weakening of the US dollar, AUD/USD may test 0.7000 in 3-6 months.
Hawkish comments from the RBA and the unwinding of rate cut pricing could provide support for the AUD as Australia’s anti-inflation progress is slow.
Chinese stimulus measures are also expected to be introduced soon, which will help stabilize the Australian dollar and iron ore prices in the short term.
The pair’s series of highs in December and July could be surpassed as the current backdrop surrounding Fed rate cuts/Powell dovishness continues to create a generally weak USD scenario.
