A forex note from CBA on the Australian dollar (comes via Bloomberg report)

Forecasts:

  • 0.7500 for Q4 of 2018
  • 0.7600 for 2019 Q1

But before that says CBA:

  • AUD is oversold but can still drop to 0.70 in short term
  • model (a replica of the RBA model of the TWI) says AUD 7% undervalued

Cites:

  • further US / China trade tensions may push down commodity prices

Also, a heads up on what to watch if there is the Fed should pause in their rate hike cycle before end of the year

  • USD would drop circa 3 to 5%,