The Australian Dollar has been a solid performer in recent months and is up 11% from its October 2022 low. Economists at Wells Fargo believe this positive trend can continue and forecast AUD/USD at 0.7800 by mid-2024.

Resilient Australian growth and favorable RBA monetary policy dynamics versus the Fed

“Given our outlook for Australia to enjoy a reasonably steady expansion over time and avoid recession, our base case remains for some further monetary policy tightening before a pause in rate hikes.”

“We believe resilient Australian growth and favorable RBA monetary policy dynamics versus the Fed are the main factors that should be supportive of the Australian Dollar over the medium term.”

“We have adopted a more constructive medium-term outlook for AUD/USD, targeting an exchange rate of 0.7800 by mid-2024. We expect the Aussie to be an outperformer among G10 currencies during this period.”