10 Jun 2015
Morgan Stanley lowers AUD/USD forecast to 0.68 by year end
FXStreet (Bali) - Morgan Stanley is now expecting AUD/USD to trade at 0.68 by year end and 0.62 by end 2016.
According to Morgan Stanley, the RBA is set to cut interest rates further down to 1.75% in Q4. The bank also argues that "the key short-term drivers of the US dollar will be growth and front-end yield differentials, which we expect to become even clearer with our team forecasting a strong retail sales figure on Thursday, adding to momentum from payrolls, housing data and the ISM."
With regards to the RBA stance, Morgan Stanley added: "There was some market frustration with the recent rhetoric from the RBA that in one breath backs hard for a lower currency but then backs away from the easing bias that would have helped achieve this outcome. We view the recent RBA rhetoric and positioning as one that seeks greater flexibility linked to the overarching concept of data dependancy"
According to Morgan Stanley, the RBA is set to cut interest rates further down to 1.75% in Q4. The bank also argues that "the key short-term drivers of the US dollar will be growth and front-end yield differentials, which we expect to become even clearer with our team forecasting a strong retail sales figure on Thursday, adding to momentum from payrolls, housing data and the ISM."
With regards to the RBA stance, Morgan Stanley added: "There was some market frustration with the recent rhetoric from the RBA that in one breath backs hard for a lower currency but then backs away from the easing bias that would have helped achieve this outcome. We view the recent RBA rhetoric and positioning as one that seeks greater flexibility linked to the overarching concept of data dependancy"