11 Jun 2015
AUD/USD heading towards 0.73 in 12-month – Danske Bank
FXStreet (Edinburgh) - Analyst Kristoffer Lomholt at Danske Bank sees the Aussie dollar slipping to the 0.7300 area in a year’s time.
Key Quotes
“Since the previous rate cut in February, we have maintained the view that RBA would only cut rates once”.
“AUD still suffers from the significant terms of trade shock (iron ore prices are still 55% below last year’s high) and in an environment of Fed hikes looming, the fundamentally overvalued AUD is vulnerable”.
“We now target AUD/USD at 0.78 in 1M (previously 0.75) and expect a Fed re-pricing to drive the cross down towards RBA governor Stevens ‘unofficial target’ of 0.75 in 3M”.
“We expect the cross to stabilise in 6-12M, when a Fed hiking cycle has been priced and the ‘Aussie’ economy recovers. We still target the cross at 0.73 in 6M and 12M”.
Key Quotes
“Since the previous rate cut in February, we have maintained the view that RBA would only cut rates once”.
“AUD still suffers from the significant terms of trade shock (iron ore prices are still 55% below last year’s high) and in an environment of Fed hikes looming, the fundamentally overvalued AUD is vulnerable”.
“We now target AUD/USD at 0.78 in 1M (previously 0.75) and expect a Fed re-pricing to drive the cross down towards RBA governor Stevens ‘unofficial target’ of 0.75 in 3M”.
“We expect the cross to stabilise in 6-12M, when a Fed hiking cycle has been priced and the ‘Aussie’ economy recovers. We still target the cross at 0.73 in 6M and 12M”.