The Australian dollar has struggled to break above the stubborn 0.7610 to 0.77 range. What’s next?
Here is their view, courtesy of eFXnews:
Barclays Capital FX Research sees AUD/USD falling gradually in 2017 arguing that although improving domestic fundamentals and a less dovish RBA should provide support for the AUD, external factors are likely less favorable.
In addition, Barclays Commodities Research team believes that the price rally in iron ore is not sustainable and forecast prices to fall to the mid-$50s/t in H2 17.
Finally, Barclays notes he Australia-US yield differential would continue to narrow in 2017, in line with Barclays’ forecast of two more Fed rate hikes this year while the RBA remains on hold.
Barclays targets AUD/USD at 0.74, 0.73, and 0.72 by the end of Q2, Q3, and Q4 respectively.
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