![]() Other central banks – such as the Bank of England earlier this week and the US Federal Reserve next month – have started to raise interest rates or soon will. That’s promising news if you’re planning that overseas trip, but it’s a trend that seems counterintuitive. ![]() NAB forecasts it will be worth about 77 US cents, Westpac 78 US cents, and the CBA 80 cents by then. What does the market think?Ĭommercial bank economists tend to be more optimistic about the dollar, at least against the greenback.Īmong the big banks, for instance, the ANZ expects the dollar to appreciate to 75 US cents by the end of year. The previous statement, in November, assumed 74 US cents and a TWI at 62. Key RBA forecasts – such as GDP growth accelerating from 4.75% in 2021 to 5.5% in 2022 before slowing to a 2.5% clip in 2023 – are based in part on those exchange rates. These are good markers because those two rates – 71 US cents and a TWI of 60 – also happen to match the assumed values used by the quarterly RBA’s Statement on Monetary Policy released by the central bank on Friday. (China’s yuan is about a third of the weight.) The trade-weighted index, based on the composition of Australia’s merchandise goods and services trade, was sitting at 60.1 as of Friday’s close. Exchange rate snapshotĪs of mid-Friday afternoon AEDT, the Australian dollar was buying 71.4 US cents, a rise of about 2% over the past week. ![]() Here’s where analysts think the Australian dollar is headed, and why those outward bound may have additional reasons for cheer. ![]()
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