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Economists at Nordea remember the virus seasonality down south. In addition, AUD/USD looks peakish relative to the Chinese credit cycle. Therefore, the aussie is expected to continue losing ground in the coming weeks.

Virus seasonality to escalate further in Down Under

“The Chinese credit impulse is likely to continue losing steam, commodity prices might thus start to cool (an unwind of the doom loop), then there’s RBA vs Fed, and Fed is clearly the more hawkish of the two – letting yields rise.”  

“North America and Europe are heading towards summer (bad news for Coronachan), while the opposite is the case down under. Australia is also lagging severely in terms of the vaccine rollout, while the US has done much better.”

“Countries such as Australia and New Zealand will have to remain under very strict border-control to prevent a winter-surge in the virus from May and onwards, and judging from the pricing of global central banks, one could argue that RBA is priced more aggressively than RBNZ, leaving AUD more vulnerable to a negative virus seasonality on the Southern Hemisphere compared to the NZD.”