NAB argues that the aussie faces downside risks in the near-term
The firm's head of FX strategy, Ray Attrill, says that these risks could lead to the aussie to fall to 62 cents against the dollar by the end of Q2. Among the potential catalysts for such a move includes US-China relations and a broader risk sell-off in the market.
"The APAC market has carried the 'risk-off' baton into our session, keeping the US dollar buoyant. The lower-than-expected Australian unemployment rate has been quickly seen through, both in terms of the number of people out of the workforce last month and the 9% fall in total hours work, which marks the report out as 'at least as bad as expected'."
Adding that putting that together, it is what is pushing the aussie to the bottom of the pile among major currencies in trading so far today.
Looking further out, the firm is more constructive on the aussie - in assuming that China's recovery will be more entrenched with the possibility of positive global spillovers.
Their year-end forecast for AUD/USD is at 0.6750.
