Credit Agricole CIB Research revises down its AUD/USD forecasts and now targets the pair at 0.69 in Q3 and Q4.

"The AUD is losing its terms-of-trade and interest rate advantages faster than we expected. The ceasefire between the US and Iran is leading to a quick retreat in global energy prices weakening the prices for Australia’s LNG and coal exports. China’s soft economic growth is leading to a further retreat in iron ore prices. The threat of higher US rates is leading to weaker gold prices. These factors have led to a plunge in Australia’s commodity terms of trade back close to pre-US-Iran war levels and the AUD is yet to catch up ," CACIB notes.

"Of course, there still could be a resumption of hostilities between the US and Iran, but it is likely that the positive effect on the AUD from the spike in energy prices would be more than offset by the negative effect from the rise in risk aversion, in our view," CACIB adds.