Bank of America Holds AUD/USD Forecast at 0.68 as Dollar Strengthens Ahead of CPI Data
Bank of America Reaffirms AUD/USD Year-End Projection at 0.68
Bank of America (BofA) has reiterated its forecast for the Australian dollar (AUD) against the U.S. dollar (USD), maintaining an anticipated exchange rate of 0.68 by the end of the year. This projection aligns with BofA's earlier outlook, which suggested a bearish stance for the first quarter, expecting the AUD to approach a low of 0.62. The bank advises caution, noting that it is premature to dismiss potential tariff risk premiums, especially considering recent U.S. tariff measures targeting countries other than China. These measures have limited the depreciation of the Chinese yuan (CNY), but downside risks remain that could impact the AUD.
Asian Currencies Steady; U.S. Dollar Gains Amid Tariff Concerns and Upcoming CPI Data
Asian currencies exhibited muted movements on Wednesday, while the U.S. dollar strengthened slightly, as investors grappled with the implications of new U.S. tariffs and awaited critical consumer price index (CPI) data. President Donald Trump's recent decision to double tariffs on Canadian steel and aluminum to 50% has intensified global trade tensions, leading to a cautious market sentiment. The dollar index edged up to 103.5, reflecting the greenback's resilience amid these developments. Market participants are now focusing on the upcoming U.S. CPI data, scheduled for release later today, which is expected to provide insights into inflation trends and potential monetary policy adjustments.
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