AUDUSD: Year-end forecast downgraded to 0.75 – ANZ
|The weakening of global risk appetite has been a major obstacle for the Australian dollar as the focus has shifted to the worsening global growth outlook. Therefore, economists at ANZ Bank have downgraded the AUD/USD year-end forecast to 0.75.
RBA market pricing remains rich
“A peak in the USD is largely dependent on a peak in rate expectations, which until recently was appearing to be the case as markets acclimatised to multiple 50 bps hikes. Renewed downward pressure on the AUD is a real possibility amid significant volatility as markets re-calibrate tightening expectations.”
“We still think that RBA market pricing remains rich, and so the local tightening cycle is unlikely to provide a lasting boost to the AUD, particularly given the focus on offshore forces.”
“The attention on growth and inflation woes will mean the AUD largely moves to the beat of global risk appetite for now. As such, we have downgraded our year-end forecasts to 0.75.”
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