CBA: AUD/USD still seen heading towards 0.83 by year-end

Commentary by Commonwealth Bank of Australia's currency strategist, Elias Haddad

• The aussie may have a "more subdued" appreciation path given that the RBA appears in no rush to raise rates
• Base case is still for AUD/USD to trade higher towards 0.83 bye year-end
• Sees the AUD rising thanks to solid economic activities and improving global growth and favourable Australian balance of payments
• US dollar is on a downward trend
• Risks are that RBA holds rates longer than expected, US-China trade tensions and faster pace of Fed rate hikes
• CBA expects the RBA to hike rates in November to 1.75%

As highlighted last month, CBA's forecast is sort of the outlier compared to the median forecast which only sees the RBA move to hike the cash rate in Q1 2019.