FXStreet reports that economists at HSBC believe the global growth recovery should remain supportive for the AUD this year.

“The post-meeting statement by the RBA’s Governor Philip Lowe contained both hawkish and dovish elements, but there was nothing really new for FX markets to digest.”

“The AUD movements are still driven by ‘Risk On-Risk Off’ (RORO) dynamics rather than local factors. We are conscious of rising US Treasury yield volatility over the near-term, as higher US yields may dent risk appetite and spur bouts of USD strength.”

“We still believe the global growth recovery remains supportive for the AUD this year. The currency’s correlation to broad commodity indices has picked up to at least a five-year high and rising terms of trade saw the current account surplus balloon out to 2.6% of GDP in 2020. This strong tailwind should persist in the coming months, particularly as Australia’s export commodity prices have risen a further 11.8% in the first quarter this year.”