UOB Research discusses trajectory for the RBA policy and AUD/USD outlook into year-end.
"AUD/USD struggled to find direction in May, largely trapped between 0.77 and 0.78 as a retreat in iron ore prices offset the still buoyant risk sentiment. The Reserve Bank of Australia (RBA) is also in a holding pattern until July when it will make a call on extending the benchmark bond for the 3-year yield target and whether to add on to the longer-dated bond buying," UOB notes.
"With broad USD weakness within the Major FX space, the expected recovery in the AUD is still going to chug along at a modest pace. We reiterate our gradual upward trajectory of AUD/USD towards 0.79 by end-2021," UOB adds.