With yield differentials beginning to turn in favor of the Australian Dollar (AUD), analysts at Morgan Stanley recommend staying long on the Australian currency.
Morgan Stanley believes the A$158 billion tax stimulus provided by Morrison government will likely help the economy absorb shocks from global trade tensions and the resulting weaker external demand.
The investment bank also sees easing of mortgage lending rules and fiscal stimulus providing relief to the Reserve Bank of Australia (RBA).
The central bank cut rates to a new record low of 1.00% last week and is expected to deliver another 25 basis point cut before the year end.
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