ANZ Research discusses AUD/USD outlook for 2021 and targets the pair at mid-year and 0.80 by next year-end.
"The Australian dollar has emerged from a turbulent year as a winner, topping the G10 and Asia performance rankings since March and cementing its position as the premier global FX risk proxy. 2021 is likely to mirror 2020, in that global dynamics will be more important than the domestic story...Accommodative policy settings will keep interest rates at record lows, pushing investors up the risk curve and supporting equities. This is an environment in which the AUD tends to perform well," ANZ notes.
"While the recovery will be incremental and a portion of this is already priced in, we think the AUD’s undervaluation provides ample room for more improvement into 2021. As such, we’ve set our year-end target at USD0.80," ANZ adds.