AUD/USD: Housing slowdown risks add to aussie downside potential – Credit Suisse

FXStreet Insights Team FXStreet

Tentative slowdown in housing prices could be an excuse for the Reserve Bank of Australia (RBA) to push back against priced-in tightening. Subsequently, risks are skewed to the downside for the aussie, economists at Credit Suisse report.

Burning down the house

“The Australian housing market, with its high reliance on variable rate mortgage borrowing, stands out as more exposed than peers to rising yields. While this aspect is still far from central to the FX investor mindset, we see scope for it to become much more relevant if sudden sharp declines in housing activity were to call back into question the RBA’s willingness to hike.”

“We retain a bearish AUD/USD target of 0.69, with risks skewed towards the lower end of our target range at 0.6750.”

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FXStreet Insights Team

FXStreet

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