According to Rob Carnell, Chief Economist at ING suggests that we should get ready for an AUD figure of 0.6-something and they’ve pencilled in a potential trough point for the pair around 0.68-0.69 over the next few months.
Key Quotes
“It’s more a reflection that we think more things are likely to go wrong (US-China trade war, geopolitical uncertainties, global stock market correction) – rather than right over the next few months. Indeed, Rob notes that the AUD’s weakness is more than just a China story – it’s been all about the slowdown in global activity in 2018 (one that FX markets were not positioned for) that’s weighed on the archetypal activity currency that is the Aussie dollar.”
“The RBA is quite happy with a weaker AUD – and despite some likely good inflation data next week (3Q CPI due Wed), we doubt that investors will have any solid reasons to chase the currency higher.”
“We could see a test of the 0.70 level over the coming week – and if we do go down and under here, look for 0.6930/40 as the next key support test.”
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