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The Australian Dollar is expected to trade at 0.71 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.70 in 12 months time
The Australian dollar hovered below $0.718 on Friday, set to end the week more than 1% lower as major currencies lost ground against the US dollar following the release of hawkish Federal Reserve policy meeting minutes. The latest Fed minutes revealed US policymakers considered quicker interest rate hikes and discussed quantitative tightening this year to tame persistently high inflation. The firm hawkish stance pushed US bond yields higher, hurting stocks and risk-sensitive currencies. Meanwhile, the Reserve Bank of Australia has repeatedly insisted that a hike in domestic rates is not likely until 2023, or until inflation pushes sustainably within its 2-3% target range. However, markets suspect it may have to follow the Fed and raise the official cash rate to 0.25% by June. The RBA also lagged behind other major central banks in dialing back pandemic-era stimulus, but is set to decide whether to end its bond-buying early this year at its Feb. 1 meeting
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