Economists at ING expect the AUD/USD pair to remain under pressure near term. However, the Aussie is set to regain some ground in the second half of the year.
Room to recover beyond the short-term
“AUD has been hit quite hard from the deterioration in global risk sentiment and geopolitical turmoil. Improvements in those two factors are needed to allow a rebound in AUD/USD, and that may only start to materialise from the second quarter onwards.”
“But the Chinese growth story continues to place AUD in a rather advantageous spot to benefit from a broader stabilisation in risk sentiment.”
“A slowdown in inflation creates problems for RBA hawks, but our base case is still that 4.10% will be reached, and that AUD/USD will climb back sustainably above 0.70 in the second half of 2023.”
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