Considering the range-bound momentum of EUR/AUD amid trade tussle between the United States (US) and China, coupled with turbulent global markets, analysts at Westpac anticipate further moves in 2020.
“The European Central Bank (ECB) monetary policy outlook is quite stable, with QE having only restarted in Nov and interest rates unlikely to be adjusted in coming months, as new President Lagarde provides continuity after the Draghi era.”
“We expect the Reserve Bank of Australia (RBA) to downgrade its Australian growth forecasts and deliver a rate cut to 0.5% in February, a prospect only about 60% priced in.”
“The Australia dollar (AUD) remains sensitive to US-China trade negotiations, where our base case is for markets to be disappointed but for talks to at least continue in the background into 2020. Brexit and EU-US trade relations are wild cards for the Euro (EUR).”
“Australia’s ongoing trade surpluses provide some insulation to AUD on crosses, but the focus into early 2020 is likely to be on Australia’s lopsided growth mix and renewed expectation of RBA easing.”
“This should see A$ weaken against the euro, below AUD/EUR 0.6100 or above EUR/AUD 1.6400, with downside A$ risks on any major market disappointment over US-China trade.”
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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.