BofA maintains bearish AUD outlook as risk hedge despite recent support

Bank of America (BofA) has announced it is maintaining its bearish outlook on the Australian Dollar (AUD) despite recent support levels. This decision emphasizes the role of AUD as a default risk hedge amidst increasing global uncertainties. BofA economists warn that while the Australian economy is recovering from the impacts of COVID-19, the slowdown in Asian market growth still poses significant downside risk to the AUD. They also cite the influence of interest rate differentials and commodity price fluctuations on the AUD's performance. With market volatility persisting, investors are advised to focus on AUD's risk-hedging role. BofA analysts conclude that despite short-term rebounds, the long-term outlook remains bearish for the AUD, particularly around major economic data releases where fluctuations can be pronounced.