ANZ (in their monthly outlook report) forecasts for the AUD.
Outlook:
- The good news story for the AUD looks well priced in
- Risks ahead are more balanced
- The carry trade may support AUD assets, but RBA easing and downside risks to domestic growth and commodity prices suggest range-bound trading
Forecasts for 2016:
- September 0.72
- December 0.67
For 2017:
- March 0.66
- June 0.66
- September 0.68
- December 0.70
Positives:
- Domestic growth has surprised on the upside
- Iron ore has maintained gains
- Risk assets have been resilient
- Rally in fixed income has supported high yield currencies
- Ever lower and more negative yields globally are driving the carry trade and supporting the AUD
- Weekly Japanese buying of foreign bonds have accelerated and hit record levels recently
Negatives:
- Weighing is our expectation of further easing from the RBA
- Rising risks to domestic growth
- The stimulus from the lower AUD to services trade appears to have peaked
- Commodities are looking stretched
