NAB have increased their AUDUSD 2020 forecast to US74c. AUD/USD forecasts are influenced by three factors; the coronavirus impact on economies, changes in the delta between interest rates in Australia and the US and also the trade war between China and the US.
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Australian dollar to US dollar bank forecasts
National Australia Bank (NAB) have revised upwards their Aussie dollar forecasts now expecting the AUD/USD rate at US80c by June 2022, up from their previous forecast of US75c.
While Westpac see the AU dollar hitting US80c 6 months earlier by the end of 2021.
For 2020, NAB sees the Australian dollar at US74c by year-end, up from a predicted US72c.
The Australian dollar climbed to 73 US cents in August, the highest level since December 2018, amid broad-based US dollar softness. Investor risk appetite, aided by the strength of the US stock market and positive US-China trade talks, has allowed the commodity currency to increase its gains. Commodity prices and a stronger Chinese yuan also supported the Australian dollar in August. Any news that will fuel optimism of a global economic rebound once the pandemic is under control is likely to underpin positive sentiment and help the AUD to rally. Having broken 72 US cents, the door is now open for the AUD to push toward 75 US cents in the coming months. September Currency Update
AUD/USD Recent 90-Day Trend
AUD/USD at 0.7279 is 2.4% above its 90-DAY average, range 0.6812 - 0.7376 .
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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.
This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate's relative value is to look at the rate's history.
The following table looks at the change in the AUD to USD exchange rate to the present day for periods going back upto 10 years:
AUD/USD 10 year historic rates & change to 18-Sep-2020 : 0.7292
US Dollar in the markets
Key fundamentals that previously propped up the USD (such as company revenues, inflation rates and interest rates) have been rapidly eroded. However, there are drivers for a temporary shift in risk demand for the US dollar. Nothing goes down in a straight line, and the US dollar might bounce before it continues its trend lower.
The US dollar has dropped steadily for the last 3 months against nearly all major currencies.
However, as reported by Bloomberg Aug 11, the shorting of the US dollar - betting that USD will continue to drop - is becoming a crowded trade and may backfire.
Bank of America predict that an early discovery of a vaccine against the coronavirus would be a positive for the US dollar. That's because Europe and Asia have a higher chance of fresh waves of infections the longer it takes for a vaccine to be found, a scenario that's bullish for the US dollar, read more at the Bloomberg report.
In July market USD forecasts started predicting US dollar weakness during the second half of 2020. This was triggered by the mid-July european leaders delivery a historic stimulus package which was seen by market commentators as positive for the euro and hence negative for US dollar.
In early May the continuing coronavirus pandemic and an associated possible re-escalation in the US-China trade tensions has moved the market into safer currencies such as the USD and JPY.
The US dollar held its value in 2019 despite the US-China trade tensions, mainly because the greenback is still considered a safer currency to own than most others.