9 Mar 2015
AUD/USD: targeting 0.74 by year-end – ANZ
FXStreet (Barcelona) - Daniel Been of ANZ, comments that falling Australian commodity exports combined with the divergence in policies between the Aussie and US will keep AUD/USD weak, targeting 0.74 levels for the pair by December 2015.
Key Quotes
“..we continue to see evidence accumulating that suggests that the AUD is likely to trade on the cheap side of fair value, our 2016 forecast remains USD0.72.”
“The risks to the terms of trade remain lower as global commodity supply continues to rise and the marginal cost of production of iron ore – Australia’s key export – continues to decline.”
“Meanwhile, the RBA has highlighted that the cash rate is likely to decline further and that “the available information suggests that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak”. Lower rates will diminish the appeal of the AUD.”
“In the United States, domestic economic momentum has slowed but the level of growth remains solid to strong and so some policy tightening is inevitable. This policy divergence between the Federal Reserve and RBA will promote AUD weakness.”
“We remain structurally bearish on the AUD, targeting USD0.74 by Dec 2015.”
Key Quotes
“..we continue to see evidence accumulating that suggests that the AUD is likely to trade on the cheap side of fair value, our 2016 forecast remains USD0.72.”
“The risks to the terms of trade remain lower as global commodity supply continues to rise and the marginal cost of production of iron ore – Australia’s key export – continues to decline.”
“Meanwhile, the RBA has highlighted that the cash rate is likely to decline further and that “the available information suggests that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak”. Lower rates will diminish the appeal of the AUD.”
“In the United States, domestic economic momentum has slowed but the level of growth remains solid to strong and so some policy tightening is inevitable. This policy divergence between the Federal Reserve and RBA will promote AUD weakness.”
“We remain structurally bearish on the AUD, targeting USD0.74 by Dec 2015.”