Westpac on the Australian dollar, looking for it still higher but not by much.
Citing:
- The equity surge following the US elections,
- optimism over Covid-19 vaccines,
- and elevated iron ore prices have all played a role.
Since the US dollar typically underperforms in global economic upswings, dips in AUD/USD should be shallow.
However, there are some brakes on further gains near term, including
- upward pressure on US Treasury yields following the Democrats' recapturing of Senate control,
- the RBA's haste to announce another A$100bn QE program,
- ongoing pain for Australia's tourism and education exports,
- and tensions with China which will hurt both investment and exports.
end-March forecast is 0.78
