According to analysts, the Australian dollar is facing the choice of the right path at the moment. On one hand, the indicated currency can lead to the top, while on the other, to decline. Nevertheless, experts are sure that the Australian dollar will try not to miss the chance and rise.
According to the forecast of currency strategists at Westpac Bank, the Australian dollar may grow significantly in the short and medium-term. This conclusion was made on the basis of decisions of the Reserve Bank of Australia (RBA), which took a number of measures to increase liquidity. Westpac's updated forecast provides growth of the AUD/USD pair to the level of 0.7200 by the end of this year, although previous calculations suggested that the Australian currency will not go beyond the level of 0.6800. As for the forecast for next year, the bank expects the AUD/USD pair may rise even higher - up to 0.7600,.
Many experts doubt such optimistic expectations, since the current dynamics of the Australian dollar is extremely contradictory. On the morning of Tuesday, June 16, the AUD/USD pair rose to 0.6959 - 0.6960, but then sharply lost ground. Later, it tried to gain impulse, but this did not give the desired result. As a result, this currency pair was in the low range of 0.6913-0.699, from which it is very difficult for the AUD to get out.
According to analysts, the markets are worried about the possible negative reaction of the RBA to the current rally of the national currency. Investors are worried that the regulator is able to take measures to weaken the "Aussie". Experts from National Australia Bank (NAB) also paid attention to the growth of the AUD/USD pair by 25% and a 20% rebound in the trade-weighted index "Aussie" compared to the lows of March 2020. However, NAB is confident that the regulator will not make unexpected decisions on supply or monetary policy. NAB's experts see no cause for concern in the current situation.
Experts believe that the sharp movements recorded in the dynamics of Australian currency were caused by panic due to COVID-19 pandemic. Earlier, the RBA explained the sharp decline in AUD sales in global stock markets in March. Another reason for the rapid collapse of this currency was its massive sales by domestic investors. This was required to maintain fixed hedge ratios for Australia's international assets.
As a result, the Australian currency was a point at which a crucial decision should be made, periodically declining but at the same time tending to increase. According to analysts, the Australian dollar chose growth. A further rebound, which provoked a sharp jump in the AUD/USD pair, occurred in the wake of a sharp improvement in sentiment regarding risky assets. NAB believes that the current recovery of the Aussie is caused not only by a reassessment of risk, but also by rising prices for raw materials.
According to experts, the danger to the Australian dollar is the second wave of the COVID-19 pandemic. In the event of a severe outbreak, the indicated currency will fall significantly. Analysts summarize that in the case of such a scenario, the AUD/USD pair expects a surge in sales.
