The Australian dollar is unlikely to eclipse the US dollar. Therefore, economists at DBS Bank have lowered their AUD/USD year-end forecast to 0.65.

AUD will not be immune to risk aversion

“We have lowered our end-2022 forecast for AUD to 0.65 from 0.71.”

“For the rest of this year, the Fed’s unapologetic readiness to control inflation at the expense of growth should keep the USD strong against the currencies of East Asia, Australia’s largest export destination.”

“China, the country’s largest trading partner, is experiencing weaknesses in its economy and currency.”

“Like other commodity-led currencies such as the CAD and NZD, AUD will not be immune to risk aversion.”