By eFXdata — Jul 06 - 09:30 AM
Societe Generale Research discusses AUD outlook in light of the outcome of the RBA July policy meeting.
"This morning’s policy meeting concluded with cautious economic optimism, a mini-tapering of asset purchases to A$4bn per week from September onwards (from A$5bn now), and a suggestion rate hikes aren’t likely before 2024," SocGen notes.
"We don’t think that the RBA can prevent AUD/USD from rising further if commodity prices remain high, and as the economy recovers from the latest round of lockdowns. But the currency will remain soft enough to ensure that Australia’s current account surplus remains sizeable. But no wonder that AUD bulls continued to migrate to the NZD. Not such an enticing balance of payments story, but at least the RBNZ is likely to react to recovery and housing inflation with (much) earlier rate hikes. There’s plenty more downside to AUD/NZD," SocGen adds.
Société Générale Research/Market Commentary