AUD/USD: Renewed downside pressure during 2020 – Rabobank

Sandeep Kanihama FXStreet Contributor

Jane Foley, head of FX strategy at Rabobank, suggests that given its geographical position and its trade links, the AUD is often traded as a proxy for Chinese growth.

Key Quotes

“Although a Phase 1 trade deal between the US and China is thus positive for the AUD, the risks associated with its implementation and the potential that a phase 2 deal may never be signed are not.”

“Slowing economic growth in Australia and the determination of the government to return a budget surplus suggest that there is the risk of further rate cuts from the RBA in 2020 and, when rates reached a floor of 0.25%, QE is likely to be invoked. While there may be some initial respite for the AUD, we see risk of renewed downside pressure on AUD/USD during 2020.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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