The Australian dollar has extended its depreciating trend over the past month, with AUD/USD briefly falling below 0.70 for the first time April 2009. The main drivers behind this latest leg lower were further declines in commodity prices amid rising concerns about China, both key to prospects for Australian exports.
An improvement in global risk sentiment and a surprisingly 'dovish' line from the US FOMC at its latest policy meeting saw AUD/USD rally above 0.72 but it remains vulnerable to renewed market volatility.
More positively, comments from RBA Governor Stevens at his recent semi-annual testimony were more upbeat about economic prospects and also suggested he wascomfortable with the current monetary policy setting and level of the exchange rate. Meanwhile, markets still await new Prime Minister Turnbull's policy initiatives.
"Looking ahead, we believe further stabilisation in Chinese data and financial markets, aligned with firming commodity prices, should support the AUD. AUD/USD is forecasted at 0.75 end 2015, rising to 0.78 at end Q2 2016", says Lloyds Bank.


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