AUD: Perfect storm - Nomura

Peter Dragicevich, Research Analyst at Nomura, points out that the AUD has declined on the back of the FOMC-induced rise in the USD and comments from RBA Governor Lowe pointing to a lack of urgency to raise interest rates.

Key Quotes

“We think this position adjustment in the AUD could run a little further in the near term, but fundamentally dips down towards 0.78-0.79 should remain supported. The domestic economic outlook is improving, the turn in the RBA cycle should continue to be priced, we do not think the rebound in the USD will last, and Australia’s balance of payments dynamics remain AUD positive. We remain of the view that broader macroeconomic trends point to a higher AUD/NZD in coming months.”