Bill Evans, chief economist at Westpac, suggests that their target for the AUD to depreciate to USD0.68 over the course of 2019 remains the same, after it has held within a narrow range of USD0.704 to USD0.716 over the month.

“On the demand side, confidence is rising in response to China’s commitment to stabilising growth through lifting credit; easing restrictions on the shadow banking sector; supporting bond issues by local governments to finance new infrastructure investment; tax cuts; and some support to housing in selective regions. This stability at high levels for key commodity prices is providing solid support to the Australian dollar – indeed the fair value of the AUD as measured by commodity prices, is currently holding well in excess of current spot. On the other hand, interest rate differentials continue to weigh on the AUD.”