AUD/USD to decline moderately going forward – Danske Bank

According to analysts from Danske Bank, a weaker world boom outlook and the Federal Reserve tightening are possibly to guide the US dollar. They forecast AUD/USD at 0.70 in three months and at 0.69 in six months.

Key Quotes:
“Fading international boom momentum has supported wide USD, whilst concerns round the Chinese property quarter have weighed on expenditures of key Australian export commodities, specifically iron ore.”

“The Reserve Bank of Australia caught with its diagram to taper asset purchases in September, however the QE application used to be additionally prolonged till February 2022. While restrictions nevertheless weigh on monetary activity, RBA expects to see a rebound toward year-end as vaccination insurance improves, and September PMIs already indicated easing strain on economy. That said, market pricing of RBA is already very aggressive.”

“Weaker international increase and Fed tightening are possibly to aid USD further. While we anticipate to see similarly weakening in Australian export prices, AUD already seems susceptible relative to its Terms-of-Trade, and as a consequence we proceed to anticipate solely quite decrease AUD/USD going forward.”

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