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Analysts at Rabobank, expect the AUD/USD pair to move toward 0.70 on a 12 months view. They point out that the exposure to Chinese risk explains Australian Dollar sensitive to emerging markets.  

Key Quotes:  

“Australia’s exposure to China through commodity exports explains why the AUD can be more sensitive than other G10 currencies from bad news stemming from emerging markets.”

“Risks regarding Chinese growth in addition to further USD strength both suggest that AUD/USD is likely to remain under pressure in the coming months.”

“We expect Chinese fundamentals to lead to further weakness in the CNY vs. the USD.  AUD/CNY is still trading below its January levels but further weakness in AUD/USD will likely be necessary to prevent prices of Australian exports rising in CNY terms.”  

“The RBA is unlikely to stand in the way for further slippage in the value of the AUD.”

“Looking ahead the RBA is forecasting that “CPI inflation is expected to be quite low in the September quarter”. It has also signalled that the “Board does not see a strong case to adjust the cash rate in the near term”. Against a backdrop of USD strength, we expect AUD/USD to edge towards 0.70 on a 12 mth view.”