ANZ Research adopts a neutral bias on AUD in the near-term, while maintains a bullish bias over the medium-term.
"Recent weeks have been relatively poor for risk sentiment, with the AUD falling from its September high. Concern over the shape of the near-term growth path has been reignited by fading data momentum, fresh restrictions in Europe and a diminished chance of near-term US fiscal stimulus. While these, alongside US political uncertainty, introduce scope for short-term volatility, the broader trend of global growth remains supportive of the AUD," ANZ notes.
"The risks around domestic preliminary retail and labour data remain balanced given the restrictions still in place in Victoria. This will weigh against the normalisation seen elsewhere in the country. For the AUD, global factors are key, with the impact of domestic policy on the currency likely to wane," ANZ adds.