Analysts from Lloyds Bank favor the upside in the AUD/USD pair as long as risk sentiment holds up.
Key Quotes:
“Having experienced an aggressive sell-off through the first few weeks of 2016 – hitting a new 6-year low below 0.69 – AUD has strengthened by over 7% since mid-January.”
“The rally in AUD/USD has been supported by the stabilisation in risk sentiment, the relatively hawkish stance of the RBA (which maintained its policy rate at 2.00% in its February meeting) and growing optimism around the domestic economy.”
“The pair has found further assistance from the re-pricing of rate expectations in the US, with the first fully priced 25bp hike pushed back to early 2017. This has led to USD weakness, most evident against high-yielding commodity currencies.
“As long as global risk sentiment holds up, we favour gradual AUD appreciation, toward 0.78 by the end of the year.”
(Market News Provided by FXstreet)