Commonwealth Bank's (CBA) Global Economics & Markets Research team has maintained their currency prediction, forecasting a fall in the Australian Dollar to US Dollar exchange rate.

Joe Capurso, CBA Head of International Economics, said that CBA economists predict a 'temporary dip' below 70 US cents.

This is despite the recent strengthening of the Australian Dollar after last week's meeting of central bankers at Jackson Hole, Wyoming. 

CBA economists have pointed to a few 'determining factors', including the recovering job market and ongoing spread of COVID-19, as indicators of this announcement.

"[US Federal Reserve] Chair Powell's comments at Jackson Hole were very close to our expectations and none of our views have changed as a result," Mr Capurso said.

Mr Capurso said that the strength and breadth of the job market recovery in the US will lead the way for the announcement of the Federal Reserve's tapering of asset purchases in its 22 September meeting.

However, risks remain due to spikes in COVID-19 infections and deaths.

Australia's Reserve Bank places the AUD's 'fair value' below USD 0.70, and one effect of the central bank's quantitative easing program is that it weakens the Aussie Dollar, favouring exports.

Westpac economists previously predicted that the Aussie dollar would reach USD 0.80 and hold until at least June 2022. 

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