RBA seen cutting rates again … "but not quite yet". And AUD forecast.
The Reserve Bank of Australia sept September 2019 policy meeting is on 3 September 2019
- expected to be on hold
- announcement and statement due at 0430GMT
I posted a preview earlier:
Here is another one, a snippet from what HSBC are expecting:
unemployment rate trending higher and global trade tensions escalating, more RBA cuts are expected
- but not quite yet
- we see the RBA on hold in September as it continues to assess the impact of its recent cuts
- Our central case sees the RBA cutting its cash rate in 4Q 2019 to 0.75% and then again in 1Q20 to 0.50%
And, on the AUD (again, in summary):
AUD-USD ... has notably outperformed Asia FX lately
- fundamental driver has been the stabilisation in rate differentials
- housing looks to have bottomed
- a further spike in our proprietary 'RBA fiscal jawbone indicator' reveals the central bank's limits and preference for the government to provide cyclical support
- 2Q GDP print presents downside risks
the test to the AUD's resilience comes mainly from global factors
- The AUD is vulnerable to further volatility in US-China trade tensions
- the rise in the terms of trade that could deliver Australia its first current account surplus since the 1970s in 2Q is waning
Overall, this environment argues for the AUD-USD to remain in its gradual downtrend, keeping the currency in a 0.67-0.70 range for now. Yet we recognise that global risks have increased and a further deterioration could see the currency slide into the low-60s, levels last seen in 2009.
Reprinted from Forexlive，the copyright all reserved by the original author.
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