I posted earlier on Capital Economics' preview of next week's RBA meeting:
In their piece CE reiterated their view on the AUD that I didn't include in the piece. I had referred to it earlier this week, but a bit more now:
The consensus is that the Australian dollar will rebound from US$0.72 now to around US$0.75 by the end of the year.
- By contrast, we believe that it will continue to weaken. While the financial markets are already pricing in looser policy, we think that the exchange rate would still weaken a little further once the consensus shifts towards rate cuts.
- We also believe that the prices of Australia's key commodity exports, iron ore and thermal coal, may fall by around 25% and 10% this year, respectively. Finally, we believe that stock markets will continue to sell off this year.
- All told, we've lowered our year-end forecast for the Australian dollar from US$0.65 to $0.60.
I also posted earlier from Barclays:
Adding this in now, a snippet via Morgan Stanley on the RBA:
- The bank are saying the risk of recession in Australia is rising
- Hence they have abandoned their call for rate hikes from the Reserve Bank of Australia in 2020
Also, Via JP Morgan:
AUD likely to weaken by end 2019
- commodity pries, terms of trade supportive in near term
- but Fed wariness and depricing of Fed hikes suggests could be negatives for high beta like the AUD ahead
