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26 Aug 2013
Flash: AUD/USD 1-month forecast lowered to 0.8800 – UBS
FXstreet.com (New York) - A weaker AUD is a necessary condition for full economic rebalancing in Australia, notes Gareth Berry, a Research Analyst at UBS.
Key quotes
“We believe it will happen one way or the other - if AUDUSD refuses to fall of its own accord from current levels, another RBA rate cut would ensure a resumption of the downtrend.”
“The Eurozone has not been so lucky of course. A strong euro has obstructed rebalancing there, but we believe market forces will be kinder to Australia given the currency's main attraction is its yield advantage and the RBA has plenty room to cut even more if the transition away from mining does not progress smoothly. We lower our 1m and 3m AUDUSD forecasts to 0.88 (from 0.90).”
Key quotes
“We believe it will happen one way or the other - if AUDUSD refuses to fall of its own accord from current levels, another RBA rate cut would ensure a resumption of the downtrend.”
“The Eurozone has not been so lucky of course. A strong euro has obstructed rebalancing there, but we believe market forces will be kinder to Australia given the currency's main attraction is its yield advantage and the RBA has plenty room to cut even more if the transition away from mining does not progress smoothly. We lower our 1m and 3m AUDUSD forecasts to 0.88 (from 0.90).”