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Despite improvements in the risk environment, it’s not clear that the increased default risk is adequately reflected in the AUD/USD pair. The resilience of the Aussie appears premised on a V-shaped recover, per ANZ Bank.

Key quotes

“The market is underweighting the duration of the shock to global commerce and overweighting the prospects of a V-shape recovery.”

“We think AUD/USD current levels are towards the top of the trading range and hold a downside bias for the next quarter.”

“We are comfortable retaining a forecast for the Aussie in the low 0.50s, but note that bottom is likely to come in the latter part of the second quarter.”