AUDUSD could slump to 0.6650 before staging a recovery – Westpac

Record trade surplus and solid growth outlook reinforce the multi-month scope for AUD revival. Near-term though, the resilient USD suggests risks as far as 0.6650, in the view of economists at Westpac.

Recession talk cannot seriously be applied to Australia for now

“Coal and LNG export revenue led the way as exports jumped 9.5% in the month. We expect sustained high prices for energy products, providing some insulation for the Aussie. Admittedly, insulation is needed, with talk of US recession gathering steam and weakness in metals prices implying a lack of confidence in the China H2 recovery story (a jump in China’s June services PMI was brushed aside).” 

“Recession talk cannot seriously be applied to Australia for now, reinforcing the multi-month scope for AUD revival. Near-term though, the resilient USD suggests risks as far as 0.6650.”