The Australian Dollar enjoyed an upbeat retail sales report and some calm in markets. What’s next?
Here is their view, courtesy of eFXdata:
MUFG Research discusses AUD outlook and highlights 3 key reasons for possible support for the currency in the medium-term.
“We continue to see limited downside for AUD from here with a large portion of downside risks priced and some tentative signs of stability in global markets will help reinforce that support going forward.
Firstly, we do not expect the recent sharp pace of renminbi depreciation to be sustained, which in turn will help reduce emerging market volatility.
Secondly, we do not expect a significant escalation in the trade conflict and while the Trump administration will continue to threaten further tariffs, we do not expect a tradeconflict fuelled global growth slowdown.
Finally, the data in July in Australia provides optimism that domestic demand conditions will improve,” MUFG argues.
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