Nordea Research discusses AUD medium outlook and thinks that it is still too early to buy into AUD again and maintains a bearish bias into year-end.
"We have been tactically short the AUD for a large part of 2018, as several of the factors that have caused the aforementioned Asian export of disinflation can also be considered AUD negative factors. A Chinese slowdown with consequently weaker CNY and lower industrial metal prices are factors that speak in favour of weaker AUD. Hence, the disinflationary impulses from; Asia tend to weaken AUD against the USD as they unfold. We don’t expect the AUD to reverse its trend; unless/before the disinflationary winds start to fade.
We still judge that it is a story for 2019 and expect a weak November/December for the AUD," Nordea argues.