FX Strategy: AUD Forecasts Revised Lower – June 2013
We have been flagging likely downward revisions to our AUD forecast for a couple of weeks now, following first the somewhat unexpected May RBA rate cut then the range-break higher in US Treasury yields
- Price action since Monday’s AUD bounce convinces us to revise our AUD forecasts lower; support from down side US data surprises likely to prove ephemeral.
- Higher FX volatility kills the carry attractions of AUD.
- Short positioning and likelihood of support holding in the 0.94 area (at least temporarily) leads us to expect recent losses to be consolidated not extended.
- Rising US (real) yield backdrop to drive ‘fair value’ lower and is key to our new lower forecast track.
For further analysis download the full report.
- FX Strategy: AUD Forecasts Revised Lower – June 2013 (PDF 253 KB)