Westpac forecast for the Australian dollar
The weakness of the US dollar after the meeting of the Federal Committee on open market operations of the US Federal Reserve provided support to the pair AUDUSD, which it certainly needed, according to Sean Callow, a market research analyst in Westpac. "Ahead of the announcement of the Fed's decision, the pair traded at a fresh 3-month low of about 0.7675. Prices for basic commodities produced in Australia extended its losses, and Australian market-based basket dropped 4.3% this month, plunging to the lowest level since the end of November.
While AUDUSD was near 0.7625, yield differentials have continued to evolve against the Australian dollar, leaving the short-term fair value of the currency below 0.75. Trade tensions, initiated by the government of the United States still persist, and the Group of twenty (G20) was forced to admit its impotence to ensure the fulfillment of accepted obligations to prevent the spread of protectionism. Trump's anti-China trade measures will only ignite the flames of a trade war. But there is also positive news: Australia continues to create new jobs. In the near future we expect the soft tone of the US dollar will remain – probably, this circumstance will be enough for AUDUSD to trade around 0.77" – said the expert.