1 May 2015
AUD/USD expected to see 0.74 in 6M – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, believes that a rate cut or not, the RBA will likely talk down AUD strength, further forecasting AUD/USD to head towards 0.74 levels over the next 6 months.
Key Quotes
“Almost irrespective of whether the RBA do cut rates next week it is very likely that the central bank will lace its week policy statement with another blunt message that it would favour a fall in the value of AUD/USD. Such a message would serve to reinforce the difficulty in breaking above the recent high near AUD/USD0.8076. However, the strength of this resistance area will be severely undermined if the USD continues its sell off.”
“The RBA is not the only central bank which is likely to fight back against USD weakness. The RBNZ has recently turned move dovish and the ECB and the BOJ may both step up their dovish rhetoric if their battles against deflation are seen to be threatened by USD falls.”
“We expect AUD/USD to head towards 0.74 on a 6 mth view.”
Key Quotes
“Almost irrespective of whether the RBA do cut rates next week it is very likely that the central bank will lace its week policy statement with another blunt message that it would favour a fall in the value of AUD/USD. Such a message would serve to reinforce the difficulty in breaking above the recent high near AUD/USD0.8076. However, the strength of this resistance area will be severely undermined if the USD continues its sell off.”
“The RBA is not the only central bank which is likely to fight back against USD weakness. The RBNZ has recently turned move dovish and the ECB and the BOJ may both step up their dovish rhetoric if their battles against deflation are seen to be threatened by USD falls.”
“We expect AUD/USD to head towards 0.74 on a 6 mth view.”