AUD/USD: the Australian dollar returns to test major resistance

AUD/USD may retreat as the global economy slows

The Australian dollar has rallied nicely from its low in January, benefiting from growing expectations of monetary tightening by the RBA. Although the Australian central bank has repeated that it will not raise its rates before 2024, operators are increasingly expecting a rapid rise in rates. They anticipate a first rate hike of 25 basis points in June and six more by the end of the year, which would be consistent given full employment and persistent above-target inflation. at 2-3%.

Despite the likely change in hawkish tone from the RBA, AUD/USD may continue its underlying bearish trend due to its heavy dependence on the global economy. Indeed, the Australian dollar is one of the most cyclical currencies, outperforming when the global economy picks up and underperforms when it slows. However, the global economy should continue to slow over the next few months and the slowdown is probably underestimated. The consensus is often too pessimistic when the economy starts to pick up speed and too optimistic when it starts to slow down…

It would therefore not be surprising to see bad economic surprises and therefore the AUD/USD under pressure over the next few months. the Global Credit Impulse, which measures the evolution of the flow of credit to private agents as a percentage of GDP, suggests complicated months for the global economy and cyclical assets until the end of the year.

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