The Australian dollar, in tandem with the US dollar, sustains its upward trajectory, with the current AUD/USD rate standing at 0.6719.
Despite the initial positive shift in AUD at the start of the year, the Reserve Bank of Australia (RBA) maintains a pessimistic outlook on the Australian dollar's prospects. The RBA anticipates that any softening of credit and monetary policy by the US Federal Reserve, expected no later than Q2 2024, could significantly alter market conditions.
The RBA highlights geopolitical risks on a global scale, pointing out that political elections are scheduled in countries representing 40% of the world's population. The electoral season kicks off in Taiwan this Saturday and concludes with the US elections in November.
Expressing concern, the Reserve Bank of Australia suggests that relationships between the US and certain Asian countries may become strained, inevitably impacting currencies associated with heightened risks.