AUD/USD Raised Year-End Target to 0.75

WikiFX News (4 Oct.) - Recently, Westpac raised the AUD/USD end-2020 forecast to 0.75 from 0.72 but stuck to the forecast that the pair price will gain more momentum to 0.80 in 2021.

The fair value model continues to signal an undervalued AUD. With fair value currently holding at 0.78, it will outpace the end-2020 target of 0.75.

Other factors which may continue supporting AUD include the ongoing boosts to risk-on tilt, firm commitments by central banks to support liquidity and demand, developments with vaccines, and Australias ongoing current account surplus which is expected to register at $46 billion for 2020 including $10 billion for Q4.

In addition, Australia's GDP will lift by 2.8% in Q4 supported by the reopening of the Victorian economy and ongoing progress in other states. Global economy is predicted to see a significant recovery in 2021, with a lift to 5% on the cards. The relatively more rapid recoveries in the Asian region will boost their currencies, which in turn will provide support for AUD

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Chart: Trend of AUD/USD