AUD/USD made a fresh cycle low. In the view of economists at ING, the downturn should continue.

Aussie to rebound in the second half of 2023

“We remain bearish on AUD/USD into year-end, as risk sentiment fragility, China’s economic (and currency) woes and a strong USD all point to continued weakness in the pair.”

“We currently forecast a bottom of about 0.60-0.61 around year-end before a rebound that should accelerate in the second half of 2023. A break below 0.60 this year is entirely possible though.”

“The Reserve Bank of Australia surprised on the dovish side in October as it delivered a ‘small’ 25 bps hike. Our base case is that 25 bps increases will become the norm. The FX implications, for now, should remain quite secondary.”