AUD/USD is set to remain prey to global risk sentiment, occasionally probing above 0.60 but overall biased back towards the 0.55 handle multi-week, according to analysts at Westpac Institutional Bank.

Key quotes

“Our Economics team has slashed its Q2 GDP forecast to -3.5%qtr then -0.3%qtr in Q3, sending the unemployment rate soaring to 11%. However this grim outlook doesn’t necessarily mean fresh weight on AUD/USD.” 

“AUD/USD is likely to remain prey to global risk sentiment, which means occasional squeezes to 0.60 or above but underlying fragility that leaves open a return to the 0.55 handle on renewed waves of risk aversion and/or USD funding strains.”