AUD Q4 2017 forecast revised higher, but outlook remains bearish – Morgan Stanley

Dhwani Mehta FXStreet

Analysts at Morgan Stanley have upgraded their AUD price-forecast for Q4 2017, but retained relatively bearish outlook for the currency.

Key Quotes via Livesquawk:

“We revise up our forecast for the AUD to 0.70 by 4Q17 (from 0.65), but retain our relatively bearish outlook for the currency.”

“Our upward revision reflects a marking-to market of the continued rally in bulk commodities, which we believe has been a key factor behind the appreciation of the currency since year-end.”

“Meanwhile, tightening front-end rate differentials still represent an opposing force, pulling the AUD lower.”

“We believe this will continue to be the case, given substantial slack in the Australian labour market and a weak outlook for housing, which means the RBA is unlikely to tighten policy any time soon.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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