7 Apr 2015
AUD/USD year-end target at 0.73 – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, expects a dovish RBA, vulnerable economic outlook and ties into Chinese economy to weigh on AUD/USD and drag the pair lower towards 0.73 by 2015-end.
Key Quotes
“AUD is up over 1% and is the only primary currency to gain ground against the USD today. The RBA left rates on hold at 2.25% (consensus had been mixed, with a significant risk of a rate cut priced in).”
“The RBA statement maintained a dovish bias, stating that further easing may be appropriate ahead. In the details the RBA highlighted, falling commodity prices, rising commodity supply and a deterioration in the terms of trade, combined with accommodative global financial conditions and a domestic economy that is expected to operate with spare capacity for some time; with further depreciation in AUD likely.”
“From our perspective, the dovish RBA, vulnerable domestic economy and ties into the Chinese economy should all weigh on AUD.”
“Accordingly, we expect the currency to reach fresh lows in 2015, but to decline at a more moderate pace, with the bulk of the decline having already occurred.”
“Accordingly we hold a year‐end forecast of 0.73.”
Key Quotes
“AUD is up over 1% and is the only primary currency to gain ground against the USD today. The RBA left rates on hold at 2.25% (consensus had been mixed, with a significant risk of a rate cut priced in).”
“The RBA statement maintained a dovish bias, stating that further easing may be appropriate ahead. In the details the RBA highlighted, falling commodity prices, rising commodity supply and a deterioration in the terms of trade, combined with accommodative global financial conditions and a domestic economy that is expected to operate with spare capacity for some time; with further depreciation in AUD likely.”
“From our perspective, the dovish RBA, vulnerable domestic economy and ties into the Chinese economy should all weigh on AUD.”
“Accordingly, we expect the currency to reach fresh lows in 2015, but to decline at a more moderate pace, with the bulk of the decline having already occurred.”
“Accordingly we hold a year‐end forecast of 0.73.”