Australian one hundred dollar and fifty dollar banknotes are arranged for a photograph in Sydney, Australia, on Wednesday, May 23, 2018. Australia’s central bank chief Philip Lowe said last week that his nation and China together can be a force supportive of an open global trading system. Photographer: Brendon Thorne/Bloomberg , Bloomberg
The Australian dollar may climb to 85 U.S. cents within a year as commodity prices hold firm and the greenback retreats, according to the currency’s top forecaster.
The Aussie is on track to recapture the 80 cents handle in the coming months, with the dollar expected to weaken as U.S. exceptionalism fades, said Ray Attrill at National Australia Bank Ltd., the most accurate Aussie forecaster in the first quarter in Bloomberg rankings.
“This is a view heavily contingent on commodity prices remaining firm, risk sentiment holding up, and a related softening in the dollar,” Attrill said.
The bets on the Aussie reflect confidence that the global economy is on the mend as commodities ranging from oil to iron ore push higher on signs of a recovery in demand. But not everyone shares that optimism, with asset managers extending short positions on the currency into a fourth week as at mid-April.
The Aussie traded around 77 cents on Thursday and last reached the 85 mark in December 2014.
The main risk to NAB’s call is if the renewed spike in virus cases “extends to a new infection wave in Europe, which runs ahead of rising vaccination rates and necessitates fresh large-scale economic lockdowns,” Attrill said.
“Unless or until this risk eventuates, we continue to view any dips in AUD/USD back to the early April lows beneath 0.76 as buying opportunities,” he said.
– Bloomberg