Market news
01.07.2021, 09:58

AUD/USD set to decline towards the 0.7400 level – Westpac

FXStreet reports that economists at Westpac said that a strong USD and likely ongoing covid cases point to a slip towards 0.7400/25 on the AUD/USD pair.

“The RBA itself has made sure that Tuesday’s meeting is one of the most significant of the post-pandemic years, by choosing July rather than August to make the decision on 3-year yield target and the $100bn QE program which concludes in September. Moreover, 90 minutes after the statement, Governor Lowe will deliver ‘remarks’ to elaborate on the decision.” 

“Since the June meeting, the RBA’s changing tone and key events such as Australia’s booming May jobs data and the Fed’s step towards tapering QE have seen consensus solidify on no extension of the 0.1% bond target, plus an extension of QE but more likely a weekly pace that is easier to trim than a lumpy $100bn total. So A$ reaction to the decision is hard to judge. Australia’s trade position remains extremely strong. This keeps our fair value estimate near 0.85, but near term a strong US$ and likely ongoing CoVID-19 cases point to a slip towards 0.7400/25.”

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