During October the Australian dollar depreciated further against the US dollar from 0.6443 to 0.6395. Economists at MUFG expect further downside pressure on the aussie but note that the AUD/USD could start to recover in the first quarter of 2023.

Near-term outlook for AUD remains negative

“Recession is now a given in Europe and with weak growth in China unlikely to change dramatically, the near-term outlook for AUD remains negative.”

“Assuming we have a global policy pause in Q1, AUD/USD can then begin to recover.”