Bank of America expresses optimism on Aussie in 2024

In a recent report from Bank of America, analysts expressed optimism on the Australian dollar in 2024, as the RBA is expected to hold interest rates this year, while other banks prepare to cut rates. 

America's flagship bank said its positive outlook is based on expectations the Aussie will be less sensitive to global risk sentiment. 

Aussie is one of the most  sensitive currencies to global sentiment, with movements up and down alongside stocks, making it a high-risk asset. 

Bank of America's analysts said in a memo that the Aussie has proven more resilient as Australian exports grow more diversified. 

The Australian dollar has proved flexible especially as China's economy slows down in recent months, proving a more independent stature from global events. 

Australia continues to export energy in the form of natural gas to major Asian economies, making up for any drop in Chinese demand.

As for foreign investments, Bank of America said they have reached multi-decade highs, boosting local GPD. 

Bank of America enumerated other factors that boost Aussie's standing in 2024, including: 

The RBA is expected to maintain interest rates unchanged this year unlike most other major central banks.

China's economy is expected to rebound this year, boosting Australia's economy. 

Australia remains in a strong financial position compared to other G8 countries, in regards to debt and deficit, providing some space for strong financial support if growth took a step back.