AUD forecasts upped, 0.76 seen by 2017-end - Westpac

Analysts at Westpac make upward revision to the AUD/USD forecasts, citing "a substantial rally in commodity prices" as the key reason behind the renewed optimism.

Key Quotes:

“The past two months have seen a substantial rally in commodity prices

Since mid-June, iron ore has risen from USD53 per tonne to USD76 currently

Also supportive has been a lift in coal prices, thermal coal increasing from USD81 per tonne to USD99, as well as a rally in crude oil, the Brent benchmark rising from a mid-June low of USD45 per barrel to around USD52 currently

The rally in commodity prices and associated currency market reaction has seen us revise our near-term outlook for the Australian dollar higher

At September, we now look for the Australian dollar to trade at USD0.78, a touch below the current spot level  

Past this point, we rely on our assessment of the global economy and our structural fair value model to guide our forecast for the currency.

End of 2017 ...  we now expect the Australian dollar to end the year at USD0.76, previously USD0.73

We have revised up our target level for the AUD by the end of 2018 from USD0.65 to USD0.70.“