The Australian dollar recovered some lost ground in recent sessions, but analysts remain bearish on the currency, with some tipping a slide to the Australian central bank’s $0.75 target this year.
A confluence of slowing growth in China – Australia’s largest trading partner – weak commodity prices, and the Australian economy’s rebalancing away from mining-led growth sent the Aussie as low as $0.8035 against the greenback last week – its lowest level since July 2009. But the Australian currency rebounded to a three-and-a-half week high above $0.82 on Monday after Friday’s U.S. employment data showed a surprise decline in wages.
With the Australian dollar consolidating, currently hovering around $0.8179 for the second session, currency experts told CNBC that investors should sell the Aussie’s mini rally. “The market still appears to be short Aussie. While we are seeing some degree of consolidation, you should definitely sell the rally because the long-term bias is lower,” Callum Henderson, global head of FX Research at Standard Chartered, said.
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