Back
4 Feb 2015
AUD/USD forecast lowered as RBA joins the easing party - UBS
FXStreet (Córdoba) - Given the clear divergence of monetary policies between the RBA and the Federal Reserve, the UBS analyst team shifted its AUD/USD forecast lower to 0.72 in three months, 0.72 in six months, and 0.75 in 12 months (from 0.77, 0.80, and 0.80, respectively).
Key quotes
“The Reserve Bank of Australia cut its policy rate by 25 basis points to a record low of 2.25%, a decision not widely expected by the market. This drove the AUDUSD sharply lower to around 0.763 from 0.781”.
“We see the cut as a modest surprise, mostly as previous guidance indicated the RBA felt ‘the most prudent course is likely to be a period of stability in interest rates’. This statement has been dropped, and replaced with no guidance to what it will do ahead”.
“Despite this, we expect a further 25bps cut, potentially as soon as next month, given that one cut in isolation would have a negligible impact on activity. The RBA also reiterated that the AUD ‘remains above most estimates of its fundamental value’."
“Given the clear divergence of monetary policies between the RBA and the Federal Reserve, we shift our AUDUSD forecast lower to 0.72 in three months, 0.72 in six months, and 0.75 in 12 months (from 0.77, 0.80, and 0.80, respectively)”.
Key quotes
“The Reserve Bank of Australia cut its policy rate by 25 basis points to a record low of 2.25%, a decision not widely expected by the market. This drove the AUDUSD sharply lower to around 0.763 from 0.781”.
“We see the cut as a modest surprise, mostly as previous guidance indicated the RBA felt ‘the most prudent course is likely to be a period of stability in interest rates’. This statement has been dropped, and replaced with no guidance to what it will do ahead”.
“Despite this, we expect a further 25bps cut, potentially as soon as next month, given that one cut in isolation would have a negligible impact on activity. The RBA also reiterated that the AUD ‘remains above most estimates of its fundamental value’."
“Given the clear divergence of monetary policies between the RBA and the Federal Reserve, we shift our AUDUSD forecast lower to 0.72 in three months, 0.72 in six months, and 0.75 in 12 months (from 0.77, 0.80, and 0.80, respectively)”.