FXStreet reports that economists at Westpac confirm the key themes for a rising aussie, but have lowered their expectations.

“Our own central view is that while the starting point for the December quarter for AUD/USD might be even lower than our 0.72 forecast, we expect that Australia’s pandemic performance during the December quarter is likely to surprise markets to the upside.”

“Westpac is forecasting Australia’s growth rate to lift from 2.4% in 2021 (including the 2.6% contraction in the September quarter) to 5.0% in 2022.”

“We have lowered our world growth forecasts in 2021 from 5.7% to 5.5% and in 2022 from 4.7% to 4.5%. Those revisions still entail only a modest downward revision for growth in China. This increased uncertainty over the outlook has flattened and extended the profile for the AUD/USD from a 0.82 peak in 2022 to a peak in 2022 of 0.78.”

“But, as risks, specifically around the pandemic, dissipate further, including in less developed economies, in 2023, we expect AUD/USD to reach 0.80.”