AUD: Scope For A U-Turn And See An Appreciation M-Term – CIBC

0

The Australian Dollar has reacted positively to recent trade news, but is it sustainable?

Here is their view, courtesy of eFXdata:

CIBC Research discusses AUD outlook and flags a scope for a bullish u-turn in the medium-term.

“In recent years the primary driver of the Aussie dollar has changed from commodity prices to interest rate spreads, but the general direction the currency was traveling remained the same – down. That could be due to the fact that it has been supplied, rather than demand, issues that have been largely propping up prices for its key commodities,” CIBC notes.

However, going forwards the Aussie could do a U-turn and see an appreciation. Interest rates are already very low, suggesting little further room for spreads to move more in favor of the US. Meanwhile, an improvement in global sentiment could be positive for commodity prices for the right reason: higher demand rather than limited supply,” CIBC adds.

For lots more FX trades from major banks, sign up to eFXplus

By signing up for eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.