Support for iron ore prices and hopes that Beijing could lift more bans on Australian exports could soften the fall-out from China’s slowdown, though global growth fears suggest scope for further dips lower in AUD/USD. 

In terms of its budget position, current account surplus and 2024 growth outlook, Australia is better positioned than many of its G10 peers. However, in an environment of slowing global growth, the Aussie is likely to be vulnerable and we see risk of dips back towards 0.62 on a three-month view. 

As Fed rate cuts come into view next year, we expect the USD to soften and see scope for AUD/USD to rally back towards 0.68 in the middle of next year.