2 May 2016
AUD/USD headed back to 0.7200? - ING
Analysts at ING explained that the RBA opening the door to future rate cuts is a game-changer for the AUD outlook; part of the recent rally had been founded upon rate differentials moving in favour of the AUD.
Key Quotes:
"Markets are pricing in a strong chance of a cut next week (circa 60% probability) and therefore should the RBA remain on hold for now (our base case), we may see an initial relief rally in the AUD."
"Yet, expect any upside to be shortlived; we continue to think that the bearish fundamental backdrop and waning seasonal effects will see AUD trade lower in the coming months. Look for AUD/USD to fall back to 0.72 by 2Q16, while we also like to tactically sell AUD against JPY & NZD."
Key Quotes:
"Markets are pricing in a strong chance of a cut next week (circa 60% probability) and therefore should the RBA remain on hold for now (our base case), we may see an initial relief rally in the AUD."
"Yet, expect any upside to be shortlived; we continue to think that the bearish fundamental backdrop and waning seasonal effects will see AUD trade lower in the coming months. Look for AUD/USD to fall back to 0.72 by 2Q16, while we also like to tactically sell AUD against JPY & NZD."