FXStreet notes that the Aussie has a positive correlation with risk given its association with the carry trade, which is expected to continue in the short-term. Nevertheless, economists at Rabobank, see the AUD/USD trading lower at 0.67/68 on a three-month view.

“It is possible that carry trades will sustain AUD/USD around current elevated levels in the near-term. However, we remain cautious about the outlook for the AUD on a three-month view.”

“With one eye on the currency, it is possible that RBA Governor Lowe will use the August 4 RBA meeting to sound a more dovish tone. In addition, talks of an extension of the lockdowns in Melbourne could impact confidence. More broadly there are concerns about Q2 earnings and we expect these worries to drift into Q3 earnings season given the unfolding demand side dynamics.”

“On a three-month view we expect AUD/USD to adjust lower towards the 0.67/0.68 area.”