AUD/USD has regained the position of best-performing G10 currency in the year to date. The pair is expected to suffer a drop by the middle of 2023 but economists at Rabobank have edged up their 0.75 target to 12 months from 15 months.

Market will price out expectations of a Fed rate cut before the end of 2023

“We continue to expect the AUD to perform well this year relative to a basket of G10 currencies. That said, we look for a dip in the value of AUD/USD around the middle of the year. This is linked with our expectation that the market will price out expectations of a Fed rate cut before the end of 2023.”

“We have edged up our AUD/USD forecast and have brought forward our 0.75 target to 12 months from 15 months.”