AUD/USD forecasts so far in 2021 are mainly influenced by risk-on or risk-off sentiment dependent on positive or negative news of COVID-19 vaccine results and any early signs of a pick up in US inflation.
AUD/USD – The Australian Dollar finished lower against the Greenback and had some volatile sessions during the week. The AUD/USD pair slid to close lower on Friday at 0.7399 (0.7492 last Friday). Weekly range for the Aussie Battler was 0.7386 (low) and 0.7496 (high). A rise in the delta variant of Covid 19 cases in both Sydney and Melbourne saw both cities locked down, affecting 10 million people.
The Aussie is the world’s leading risk currency and is therefore always vulnerable to further sell offs when the market goes into a ‘risk-off’ stance.
OFX expect the AUD could trade between 0.74–0.78 USD in July.
Until the recent Fed Reserve pivot, the Australian dollar had benefited from the US dollar sell-off since late last year as investors moved away from the safe haven of the USD and into riskier assets. AUD Forecasts
Forecasters have changed direction on the Australian dollar saying it could fall below US70¢. Less than a month ago the same ‘experts’ were predicting AUD to hit US82¢!
Credit Suisse see AUD/USD to drop substantially towards the 0.7085 region.
Westpac downgraded its forecasts for the Australian Dollar in its July market outlook but still see scope for AUD/USD to return to the US82¢ down from their previous year-end forecast of US82¢.
Commonwealth Bank now see a high risk the Australian dollar dips below US70¢ in coming weeks after previously predicting the Australian dollar will rise to US83¢ by the end of the September quarter.
Forecasts and predictions for the AUD/USD exchange rate change all the time, affected by news events and relative sentiment towards the Australian and US economies. This continually updated article reviews AUD to USD bank forecasts and recent trends for both currencies.
Whether the US dollar will rise or drop in the future versus the Australian dollar is a difficult question and the answer really depends on many factors. The best way to consider the current AUD-USD relative value is to check the change in the exchange over a range of periods to the present day. The below table does this for periods going back 10 years.
19 Jul 2021→
|0.6% ▲||1 Week|
26 Jun 2021→
|2.7% ▼||30 Days|
27 Apr 2021→
|5% ▼||90 Days|
26 Jul 2020→
|4% ▲||1 Year|
27 Jul 2016→
|1.6% ▼||5 Years|
29 Jul 2011→
|32.7% ▼||10 Years|
AUD/USD rate change to 26-Jul-2021 → 0.7382
In the second quarter of 2020 AUD staged a rapid recovery through the months of April, May and into June up 25% from its mid-March lows to US70c in early June. This is due more to the perceived benefits to Australia of an awakening post-pandemic Chinese economy than the political-social situation in the US depressing the USD.
The Aussie had been savaged in March sliding to US55 cents the lowest since 2003. Growing fears of the coronavirus outbreak moved the market into safer currencies such as the USD and away from AUD, NZD and CAD.
The virus was a double blow to the Aussie after the earlier threat of proxy war between the US and Iran in Iraq had also pared back some of the gains the Aussie had made coming into the New Year.
The Australian dollar had started the new decade strongly climbing to multi-month highs helped along by cooling trade tensions between the United States and China and optimism for global economic growth in the year ahead.
Disclaimer: Please note that the currency forecasts and opinions of our authors should not be taken as a reference to buy or sell any financial product.