AUD/USD to trade above 0.70 next week – Westpac

Economists at Westpac Institutional Bank expect the AUD/USD pair to trade above the 0.70 next week as the Aussie economy is showing signs of improvement and the RBA is not taking as much action as its counterparts.

Key quotes

“The Australian economic narrative continues to improve steadily, with reopenings earlier than previous guidance and Treasury lowering its peak unemployment forecast. Headline consumer sentiment continued to rebound in June and fears of higher unemployment have eased.”

“Iron ore above $100 reinforces A$’s degree of insulation from swings in the global risk mood, with another C/A surplus likely over Q2.”

“A meltdown in global stocks would of course hit the Aussie, but with G10 central banks overall very much in balance sheet expansion mode while the RBA just holds the line, AUD probably has enough fuel for further trade above 0.70 in the week ahead.”