Barclays Research adopts a neutral bias on AUD/USD and a bearish bias on AUD/NZD into year-end.
"We expect the AUD to remain rangebound in H2 2021 before appreciating in 2022. The stronger-than-expected recovery of Australia’s economy, higher commodity prices and strong external sector have had little impact, especially after the AUD’s outsized outperformance in 2020. AUD beta to global growth will likely remain low, given the RBA’s dovish stance, coupled with a weaker China fiscal and credit impulse, and protracted trade tensions with China," Barclays notes.
"We expect the AUD to underperform NZD, as the RBNZ appears more willing to start normalization before the RBA. A stronger USD on front-loaded Fed tightening prospects and/or sharper China slowdown could further weaken the AUD while upside risks to our view would come from a quicker recovery that brings forward the RBA’s policy normalisation timeline," Barclays adds.