AUD/USD Outlook:
The AUD/USD is currently trading above its recent average and is positioned closer to recent highs, making it likely to increase. Recent forecasts suggest that the Australian dollar could reach levels around US75¢ in the future if favorable global conditions persist. However, mixed signals regarding potential peak levels remain present.
Key drivers:
• Rate gap: The Reserve Bank of Australia's cautious approach contrasts with the U.S. Federal Reserve’s dovish stance, potentially supporting the AUD.
• Risk/commodities: Current oil prices are relatively stable, which aids the Australian dollar, as it is a commodity currency benefiting from robust demand for exports like iron ore.
• Consumer Confidence: A notable increase in Westpac Consumer Confidence in Australia suggests a positive outlook for domestic economic conditions.
Range:
The AUD/USD is likely to drift within its recent 3-month range, reflecting ongoing volatility.
What could change it:
• Upside risk: A sustained rise in global demand for Australian commodities could drive the AUD higher.
• Downside risk: Renewed strength in the U.S. dollar or disappointing local economic data could pressure the AUD lower.
