24 Sep 2013
Flash: AUD/USD to give back gains, 0.90 by year-end - JPMorgan
FXstreet.com (Barcelona) - According to JP Morgan FX Strategists, despite the strong rebound on the AUD/USD as of late, the stance is still modestly bearish, with a year end forecast of 0.90.
Key Quotes
"Better Chinese data, a re-pricing of domestic policy expectations and a dovish surprise from the FOMC have seen a decent rally in the AUD/USD since early August. This move has been exacerbated by positioning, with speculative shorts at very extreme levels."
"While these factors may provide some support to the AUD in the near term, we do not expect these factors to be sustained over the forecast horizon, given we forecast further RBA easing and slower Chinese growth in 2014 relative to 2013."
"The main driver behind our forecast of a lower AUD is further easing from the RBA. J.P. Morgan economists expect another 25bps of easing from the RBA in 4Q13. Risks to this forecast are likely biased towards more than just one further rate cut, especially if the domestic growth story continues to disappoint relative to expectations."
"Our profile for the AUD is for gentle depreciation, which acknowledges that there are factors working to temper the speed of the decline."
Key Quotes
"Better Chinese data, a re-pricing of domestic policy expectations and a dovish surprise from the FOMC have seen a decent rally in the AUD/USD since early August. This move has been exacerbated by positioning, with speculative shorts at very extreme levels."
"While these factors may provide some support to the AUD in the near term, we do not expect these factors to be sustained over the forecast horizon, given we forecast further RBA easing and slower Chinese growth in 2014 relative to 2013."
"The main driver behind our forecast of a lower AUD is further easing from the RBA. J.P. Morgan economists expect another 25bps of easing from the RBA in 4Q13. Risks to this forecast are likely biased towards more than just one further rate cut, especially if the domestic growth story continues to disappoint relative to expectations."
"Our profile for the AUD is for gentle depreciation, which acknowledges that there are factors working to temper the speed of the decline."