The Australian dollar depreciated further on Friday, closing below 0.7000 against the US dollar for the first time since July 2020. The Aussie has been losing ground amid a series of hawkish signals from the Federal Reserve, exacerbated by risk-off trades in the currency markets driven by fears around the Omicron variant. A growing number of Fed officials have thrown their support behind normalizing policies and setting the stage for hiking rates in order to combat inflation. The Omicron variant also added downward pressures to the currency as it poses economic risks and supports the Reserve Bank of Australia’s position to keep record low interest rates. The RBA will meet next week to decide on monetary policy, with markets wondering how it might react to the Fed’s tilt towards a faster pace of tapering.
Historically, the Australian Dollar reached an all time high of 1.49 in December of 1973. Australian Dollar - data, forecasts, historical chart - was last updated on December of 2021.
The Australian Dollar is expected to trade at 0.69 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 0.68 in 12 months time.