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25 Jan 2016
AUD/USD expected to drop towards 0.68 in 12-m – Danske Bank
FXStreet (Edinburgh) - Analyst at Danske Bank Kristoffer Lomholt expects the Aussie to depreciate towards the 0.68 handle vs. the greenback in a year’s view.
Key Quotes
“Until recently, the AUD held up remarkably well despite the re-collapse of global commodity prices. For instance, while the RBA commodity index fell by 4% from September to November, the trade-weighted AUD actually rose”.
“Together with the recent developments in global commodity prices, this has increased the probability of an RBA rate cut and markets are pricing in roughly 50% probability of a rate cut in the next 6M”.
“For now, we stick to our long-held view of an unchanged monetary policy rate over the next 12M, which should limit downside risk for the cross”.
“We roll our forecast for AUD/USD to 0.69 in 1M (from 0.70) but leave our 3M, 6M and 12M forecasts unchanged at 0.69, 0.68 and 0.68, respectively”.
Key Quotes
“Until recently, the AUD held up remarkably well despite the re-collapse of global commodity prices. For instance, while the RBA commodity index fell by 4% from September to November, the trade-weighted AUD actually rose”.
“Together with the recent developments in global commodity prices, this has increased the probability of an RBA rate cut and markets are pricing in roughly 50% probability of a rate cut in the next 6M”.
“For now, we stick to our long-held view of an unchanged monetary policy rate over the next 12M, which should limit downside risk for the cross”.
“We roll our forecast for AUD/USD to 0.69 in 1M (from 0.70) but leave our 3M, 6M and 12M forecasts unchanged at 0.69, 0.68 and 0.68, respectively”.