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In light of these three developments, we have revised up our projections for the Australian dollar throughout forecasting horizon, to 0.75-0.72-0.73-0.78-0.85 AUD/USD a 1m-3m-6m-12m-24m.

However, we have kept unchanged our expectations for a modest weakening in the near term, when some uncertainties will linger on the size of the recovery in growth and domestic inflation, and when possible expansionary fiscal policy announcements in the US could further strengthen the US dollar.

Beyond the near term, the AUD should gradually rise back, given the expected improvement in the growth and inflation scenarios and the related “definitive” termination of the RBA’s interest rate hike cycle.

The Australian dollar should also pull back against the euro in the coming months, mostly as a normalisation compared to the sharp appreciation seen in the past year, and the resume rising beyond the near term, supported by a more robust growth scenario and by a widening of rate/yield differentials.

AUD, Australian Dollar, RBNZ, Currency Analysis, fx trader, forexAUD, Australian Dollar, RBNZ, Currency Analysis, fx trader, forex

AUD, Australian Dollar, RBNZ, Currency Analysis, fx trader, forexAUD, Australian Dollar, RBNZ, Currency Analysis, fx trader, forex

AUD, Australian Dollar, RBNZ, Currency Analysis, fx trader, forex

Source: Thomson Reuters-Datastream

 

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