A brief excerpt from ANZ's latest monthly FX outlook, which looks across currencies but this on the Australian dollar:
Most of the primary arguments for holding the AUD remain valid.
- Vaccine rollouts, while slow have improved the prospect of a more normal year.
- Forward indicators of global trade, like Taiwanese and South Korean export orders, are still rising.
- Portfolio flows into Asia continue to provide a tailwind for regional assets, as economic growth in China and South-East Asia outpaces the rest of the world.
A lot of positivity has already baked into asset prices, however.
- The recent rally in commodity prices also looks ready for a breather.
liquidity is the tide that lifts all boats. So while the economic outlook is sound and policy is accommodative, any pullbacks should be viewed as fresh opportunities to get exposure to the AUD uptrend.
