AUD/USD: RBA to promote unwind of Aussie gains – CIBC
|Analysts at CIBC, see the Australian dollar weakening versus the US dollar on the back of actions implemented by the Reserve Bank of Australia (RBA). The forecast AUD/USD at 0.69 by the fourth quarter.
Key Quotes:
“A broad reversal and consolidation of USD weakness has contributed to AUD/USD losses, though weakness on other crosses, including vs JPY, EUR and CAD is more telling. We anticipate further weakness over the coming weeks and into the next year.”
“Weakness will be driven by a challenging domestic economic environment – highlighted by slowing growth and rising unemployment. The RBA will respond with greater monetary accommodation, and continue, at times subtle, efforts to talk the currency lower. Ongoing tension with China, that has seen some exports to the country slow, or face restrictions, are concerning.”
“The RBA may have previously ruled out negative cash rates, though by mentioning that they remain in the policy toolbox, the market is now not so sure they won’t be used. Our expectation is that the central bank will reduce the cash rate target to 10bps from the current 25bps before year-end. The present YCC target of 25bps in the 3-year tenor is also expected to be cut to the same level.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.