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Oct 10 - 12:55 PM

AUD: Here Is Why AUD Weakness Is Deceptive? - BofA

By eFXdata  —  Oct 10 - 11:15 AM

Bank of America Global Research discusses AUD outlook and sees the currency supported on the crosses. 

"As global recession concernrise, commodity currencies have unsurprisingly faced the brunt of this pessimism. AUD is no exception reaching new lows vs. USD with the low 0.60s commensurate to "crisis" levels of October 2008 and March 2020. However, due to broad USD strength, the bilateral exchange rate misrepresents what has actually been notable resilience in AUD, all things considered," BofA notes.

 "The positive terms of trade shock partly explains this but so do structural shifts in Australia's BoP that may be more durable over time. As a consequence, while AUD/USD remains remains vulnerable to a global slowdown, AUD crosses should hold up better - AUD/NZD fair value for instance has risen above 1.15," BofA adds. 

Source:
BofA Global Research

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