24 Jul 2015
AUD/USD risks clearly to the downside - ANZ
FXStreet (Bali) - According to the ANZ FX Strategy Team, via their monthly report to clients, AUD/USD risks remain clearly pointed to the downside.
Key Quotes
"First, that the fundamental picture as it sits today is fairly reflected in the level of the AUD. However, the balance of risks on where we go next is not."
"Second, this stability is important as it feeds into the appeal of Australia as a destination for capital (ie the pricing of idiosyncratic risks into the AUD). This appetite has been shrinking lately, and we expect this trend to continue. Risks to the Australian economy, both external and domestic, look larger than the risks for the global economy as a whole."
"Third: for the USD to have a further strong and independent influence on the AUD, one needs to start forecasting a dollar cycle similar to that in 2001."
"Finally, the path of global beta is becoming more important for the AUD."
"In the near term, we do not have an expectation of another significant disturbance to global beta and as such are only tweaking our near term forecasts down by one AUD cent to 0.73 by Sept 15 and 0.72 by Dec 15. That said, risks remain clearly pointed to the downside."
Key Quotes
"First, that the fundamental picture as it sits today is fairly reflected in the level of the AUD. However, the balance of risks on where we go next is not."
"Second, this stability is important as it feeds into the appeal of Australia as a destination for capital (ie the pricing of idiosyncratic risks into the AUD). This appetite has been shrinking lately, and we expect this trend to continue. Risks to the Australian economy, both external and domestic, look larger than the risks for the global economy as a whole."
"Third: for the USD to have a further strong and independent influence on the AUD, one needs to start forecasting a dollar cycle similar to that in 2001."
"Finally, the path of global beta is becoming more important for the AUD."
"In the near term, we do not have an expectation of another significant disturbance to global beta and as such are only tweaking our near term forecasts down by one AUD cent to 0.73 by Sept 15 and 0.72 by Dec 15. That said, risks remain clearly pointed to the downside."