AUD/USD forecasts point to a consolidation above 0.70 – Danske Bank

Analysts at Danske Bank forecast the AUD/USD pair at 0.70 in one month, at 0.71 in three months, 0.72 in six, and at 0.73 in a year. They point out the global economic recovery continues to move ahead supporting the upside, and setbacks appear temporary. 

Key Quotes: 

“The coronavirus outbreak had major negative effects on the AUD in Q1, as Chinese activity and declining industrial metal prices weighed further on the currency. Since March, the AUD has rebounded strongly in line with risk sentiment elsewhere, and remarkably so. The key upside risks include a decline in broad dollar and upside in prices of industrial metals.”

“We keep our upbeat AUD/USD profile (and lift it by one figure), as a recovery continues to move ahead and setbacks appear temporary. One item worth noticing is Chinese credit data, which have also picked up pace and generally support the AUD when looking ahead. Even if short-term sentiment is a bit fragile with resurging COVID-19 worries (primarily in US states), we do not expect this to derail the trend of continued global recovery.”