AUD: Appreciation delayed slightly - CIBC


Analysts at CIBC, forecast that the AUD/USD pair will trade at 0.74 during the fourth quarter and at 0.76 in Q2 2019. 

Key Quotes: 

“Investors can be forgiven if they’re confused as to why the Aussie continues to weaken. After all, Q2 GDP came in at a very respectable 0.9% q/q pace – good enough to take the annualized rate to 3.4%. That’s above market expectations but in-line with the RBA’s own forecast for 3%+ growth in both 2018 and 2019. Private capital expenditures have been the key driver of growth over the past year, allaying fears following the collapse in mining investment earlier this decade.”

“the key to AUD weakness has been the rise in offshore funding costs borne by domestic banks. Indeed, cross currency basis swaps have widened out considerably since the start of the year. That has led to a few lenders to increase mortgage rates despite no move from the central bank that continues to be concerned with the level of household consumption given high household debt levels.”

“There is reason to be optimistic for the AUD. Despite mortgage rate hikes from domestic lenders, the RBA has pointed out that the average mortgage rate is still lower than it was a year ago. Additionally, the Bank has pointed out that there are signs that wages have troughed and risks are now to the upside. In light of recent downside, we’re revising our AUD forecast to show a slower climb, but the profile should still reflect an appreciating AUD as the RBA is likely to increase rates starting in Q3 2019.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD nears 1.1100 ahead of the close

The EUR/USD pair is at daily lows after US and Chinese authorities confirmed phase one on a trade deal agreed. Some tariffs will be rolled back as China agreed on “massive purchases” of US goods, according to President Trump.

EUR/USD News

GBP/USD extends corrective decline to 1.3330 region

The GBP/USD pair continues shedding part of its post-UK election’s gains, although at levels last seen several months ago. Hopes that PM Johnson will pass his Brexit deal through Parliament will keep the Sterling on the winning side.

GBP/USD News

Financial Big Brother is coming, but Bitcoin will remain

Central banks move quickly looking to oversight all payments. Greece could impose sanctions if digital means are not used in at least 30% of payments. Once inside the crypto ecosystem, governments have little capacity for financial censorship.

Read more

Gold: Steadily climbs to session tops, upside seems limited

Gold extended the overnight rejection slide from 100-day SMA resistance and witnessed some follow-through selling during the Asian session on Friday.

Gold News

GBP/USD extends corrective decline to 1.3330 region

The GBP/USD pair continues shedding part of its post-UK election’s gains, although at levels last seen several months ago. Hopes that PM Johnson will pass his Brexit deal through Parliament will keep the Sterling on the winning side.

GBP/USD News

Forex MAJORS

Cryptocurrencies

Signatures