Info comes via Westpac's latest projection for the Australian dollar
WPAC have a base case for a higher trend for AUD, with forecasts as per the headline to this post. Analysts summarise AUD impacts as follows.
Positives:
- Australia has had 40 consecutive monthly trade surpluses
- record 8 consecutive quarter of current account surpluses
- The anticipation of synchronised global recovery over 2021 should be a positive for AUD
Not-so-positives, noting that AUD has been the weakest G10 currency over the past month
- reflecting the RBA's aggressive balance sheet expansion (QE exceeding the pace of debt issuance)
- and perhaps also investor anticipation of China-related headwinds for Australian exports and FDI beyond the current resources boom
- Australia's sluggish vaccine rollout also puts a limit on the breadth of economic recovery from the pandemic
WPAC say range trade may persist for some time before finally breaking topside towards their forecasts.
AUD daily chart:
