Economists at ING target AUD/USD at 0.73 in the fourth quarter.

Room to recover beyond the short-term

“Markets are seeing very little chance of another hike by the summer, so we think there is some mis-pricing in the AUD curve. At the same time, the implications for AUD are not huge, given that external factors remain firmly in the driver’s seat.”

“China’s growth story is still a decent underlying narrative, but iron ore prices have dropped lately and risk sentiment has been unsupportive. AUD/USD upside in the medium-term should largely follow the broad USD decline: we target 0.73 in 4Q23.