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Idquival: You have beer goggles on if you think the AUD will bounce back

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13 May 2022

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The US CPI overnight figures have repriced expectations of a more aggressive Fed policy towards the second half of the year. Patrick Idquival from Ebury says we’re seeing the usual risk-off shift in markets on the back of this.

With equity selloffs and investors fleeing towards the mighty USD, the AUD/USD slipped 10% in April and is below 0.7000 adding further pressure on Australian importers. Patrick says volatility is going to continue to sting Australian importers and it’s only going to get worse for the AUD. Patrick thinks for the rest of the year we will continue to see AUD sell-offs until inflation normalises. In terms of hedging, activity is higher as Patrick says this is purely due to the experiences that businesses have witnessed over the past two years. Parting words from Patrick is to steer clear of the Yen, in terms of hedging its great but not to be buying as an importer…

Watch full interview here: