FXStreet (Barcelona) – Rob Rennie of Westpac, sees the softening demand for AUD/USD along with pressure from commodities to lead the pair lower towards 0.72/0.73 by 2015-end.
Key Quotes
“Over the last couple of weeks, I have put forward a number of arguments as to why we think the A$ will continue lower through to the end of the year. An additional factor I think that adds weight to rising downside risks here is signs that demand for the A$ appears to be softening.”
“We remain of the view that global iron ore supply will cap this rally and that iron ore prices will soften through the second half of the year (forecast $47 in Sep and $52 in Dec). We remain of the view that the US economy has showed clearer signs of genuine recovery in the last few weeks (taking our US surprise index up to 5 month highs). A technical Greek default looks to be an increasing possibility too, which cannot be seen as good news for higher beta currencies like the AUD.”
“We expect to see more signs of reduced global demand for A$ assets due to rising/ volatile bond yields and steepening curves.”
“We are already seeing signs of this in reduced Japanese demand for the A$ and expect to see this continuing given levels of AUD/JPY. That is an environment that sees AUD lower in my view, and we continue to target the 0.72/ 0.73 range by year end.”
(Market News Provided by FXstreet)