AUD/USD forecasts in 2022 are mainly influenced by the potential for a widening interest rate differential between the US and Australia.
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By the end of 2022, the Australian dollar is expected to rise to US75¢ but with a wide range of forecasts from as low as 67¢ to 80¢ by December.
Economists predict that if the RBA sticks to its promise and does not hike rates and the US Fed does, this could see the Australian dollar break below US70¢ over the first half of 2022.
Expected to rise to US75¢ by the end of 2022, however the Aussie dollar is forecast to have a volatile year against a range of currencies.
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 any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.