RBA policy is more likely to produce movement in EUR/AUD in Q1 2020 – Westpac

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.

Key quotes

“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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hits two-month lows amid USD strength

EUR/USD has pared its gains that followed upbeat preliminary PMIs for Germany came out above expectations, pointing to a recovery. The USD is advancing amid fears of the coronavirus.


GBP/USD drops below 1.31 amid USD strength, fails to sustain PMI gains

GBP/USD is trading below  1.31 after hitting a fresh high of 1.3172. The UK Manufacturing PMI beat with 49.8 and Services PMI with 52.9. The USD is gaining ground across the board.


Cryptos: Bears take over and draw a bloody moon

Despite appearances, Bitcoin is the asset with the best risk/benefit ratio. The current falls are adjusted to the ranges of the previous rise. Downward momentum expires in the first half of February.

Read more

Gold rebounds above $1560

The XAU/USD pair dropped to a daily low of $1556.70 during the European trading hours as the easing worries over coronavirus becoming a global epidemic and a broad-based USD strength put the pair under bearish pressure.

Gold News

USD/JPY drops to two-week lows near 109.30

The USD/JPY pair reversed its direction during the American trading hours as the risk-off atmosphere allowed the JPY to find demand as a safe-haven.