Economists at Credit Suisse turn more bearish on the Australian dollar and set their aims for 0.6550, also lowering the target range for AUD/USD from 0.6670-0.7100 to 0.6480-0.6950.

Fears of RBA gradualism and renewed Chinese growth concerns

“In order for AUD to become an enticing buying proposition for FX investors, hope of a more aggressive RBA policy stance will need to materialize. And the risk we see, given the data release schedule, is that investors might question the RBA’s willingness to surprise more hawkish on 2 Aug, with a key piece of data (wage growth) on the calendar just a couple of weeks later.”

“The recent period of AUD weakness coincided with a lengthy stretch of investor optimism around Chinese reopening prospects. While the outcome of this latest lockdown is still unclear, this poor AUD performance amid a decently supportive local backdrop leaves us less than convinced in AUD’s prospects under current more uncertain circumstances.”

“We opt to revise our AUD/USD target range lower from 0.6670-0.7100 to 0.6480-0.6950 and lower our Q3 target from 0.6760 to 0.6550.”