AUD: Store-Of-Value Appeal Unlikely To Wane Anytime Soon; US Elections Key Risk – Credit Agricole

AUD/USD continues to gain ground. What is the outlook for the pair by the end of Q3 and by year-end?

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research discusses AUD outlook and  targets AUD/USD at 0.71 by end of Q3 and at 0.72 by year-end.

“RBA Governor Philip Lowe’s pledge to not take rates into negative territory in a world of negative interest rates has generated a ‘store-of-value’ appeal for Australian government bonds (AGBs).  This appeal is unlikely to wane anytime soon,” CACIB notes.

Investors assume a V-shaped recovery in the global economy: optimism on the global recovery will remain a support for AUD/USD. The run-up to the US presidential election, as Senator Joe Biden and President Donald Trump vie to sound the toughest on China, could present a challenge for the AUD.  If President Trump is reelected, the rally in the USD would weaken AUD/USD,’ CACIB adds.

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