ANZ see scope for tactical downside for the AUD this month
Snippet from ANZ economists on the Australian dollar:
- transmission clusters across Victoria in particular have challenged the growing expectation of a pronounced bounce back in the domestic economy. Instead, if we apply consumer uncertainty to the many industries hit by the pandemic and shutdowns, the growth path for Australia is more mixed.
- For the RBA, currency appreciation above 0.70, out of line with fundamentals, will likely draw policy considerations that would see the domestic rates curve flatten
- For July, we think there is scope for tactical downside for the AUD given the negative news flow and stretched risk appetite. With global central bank support unlikely to waver, we see this as a buy-the-dip opportunity, particularly against the JPY and USD crosses. We think there will be opportunities to re-enter long positions at around USD0.65.
- With the AUD having led the recovery, there remains scope for catchup appreciation across the Asian FX complex, which would see Asia/AUD modestly supported. Our year-end targets have lifted and anchored near fair-value of 0.70, representing the more balanced environment that the AUD now sits within.
Bolding mine above. ANZ like AUD still, but see a drop this month to buy into.