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After a multi-month period of range trading, EUR/AUD has trended steadily lower since October 2020, reaching two-year lows. Economists at Westpac targets the 1.5250 mark in late 2021.

Key quotes

“We expect the global economy to rebound sharply in H2 2021, a classic scenario for AUD outperformance.”

“The ECB is uneasy about euro appreciation, with Eurozone core inflation stuck at a record low 0.2% yearr in Q4 2020. The European Union’s slow vaccine rollout is also a drag on the currency.”

“Australia’s economic recovery has faced far fewer interruptions. But with wages growth at record lows and ongoing border closures hammering services exports, the RBA rushed to announce a further $100 B in QE and a likely 0.1% cash rate until at least 2024. This stance should help slow EUR/AUD decline to around 1.56 in the coming weeks and 1.52 in late 2021.”