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23 Apr 2015
AUD/USD Q2 2015 forecast at 0.78 – NAB
FXStreet (Barcelona) - Expecting the RBA to refrain from cutting rates in its May meeting, the Team at National Australia Bank, shift their forecast for AUD/USD to the upside, anticipating the pair to end Q2 at 0.78, Q3 at 0.76 and reach 0.74 by year-end.
Key Quotes
“The general theme of a stronger USD remains a headwind for the AUD, and the recent decline in commodity prices adds to downward pressure on AUD from a falling terms of trade. This maintains our end-of-year forecast of AUD/USD at 0.74.”
“However, near term, the delay in the interest rate cut is likely to see some support for the AUD. Combined with a market that is already very short the AUD, there is a case for raising our Q2 forecast to 0.78 from 0.75; without ruling out a spike to 0.80 around the RBA meeting in May when they fail to provide a rate cut that is presently partially priced in. We also move our Q3 2015 forecast to 0.76 from 0.74.”
“Further support for a modest raising of the AUD profile is the expected delay in the US Federal Reserve’s anticipated interest rate hike. As the Fed pushes out but doesn’t remove an increase in US interest rates, the USD may find it a little harder to resume its upswing in the near term; particularly given the market is already holding extensive long positions.”
“We continue to believe that the US economy is recovering and that the data is likely to be USD supportive over time.”
Key Quotes
“The general theme of a stronger USD remains a headwind for the AUD, and the recent decline in commodity prices adds to downward pressure on AUD from a falling terms of trade. This maintains our end-of-year forecast of AUD/USD at 0.74.”
“However, near term, the delay in the interest rate cut is likely to see some support for the AUD. Combined with a market that is already very short the AUD, there is a case for raising our Q2 forecast to 0.78 from 0.75; without ruling out a spike to 0.80 around the RBA meeting in May when they fail to provide a rate cut that is presently partially priced in. We also move our Q3 2015 forecast to 0.76 from 0.74.”
“Further support for a modest raising of the AUD profile is the expected delay in the US Federal Reserve’s anticipated interest rate hike. As the Fed pushes out but doesn’t remove an increase in US interest rates, the USD may find it a little harder to resume its upswing in the near term; particularly given the market is already holding extensive long positions.”
“We continue to believe that the US economy is recovering and that the data is likely to be USD supportive over time.”