Economists at CIBC Capital Markets believe the AUD/USD pair is now in a period of consolidation, nonetheless with support for renewed appreciation remaining intact. 

Tempered pace of appreciation for the aussie in the coming months

“We have revised the path of AUD/USD appreciation to a moderately slower pace over the next quarters. We forecast the aussie at 0.8000 at end-2Q, the same level reached at end-February.”

“Support for AUD gains continues from a rebound in domestic activity and much improved trade and current account positions. Global reflation has not had the same influence of late as early in the year, though Australia’s leverage to higher commodity prices both generally, and specifically to industrial commodities in light of enthusiasm for infrastructure spending, remains important underlying support.” 

“The RBA, as with other major central banks, has reiterated its accommodative stance. The support for activity and in turn for assets and the currency remains in place.”

“One risk factor arises from ongoing waves of coronavirus infections in various countries, being a possible headwind to already bullish global growth forecasts. The AUD as a high beta to global risk appetite might be seen as vulnerable in that circumstance.”