Rabobank forecasts AUD/USD to 0.70 (six month horizon)

Via a note from Rabobank in London:

• AUD … wild ride in the past few weeks
• between mid-July and the start of this week, AUD/USD retraced all of the gains that it had made since late April, before showing signs of recovery
• reasons for the swings are linked both to a change in expectations regarding RBA policy and to the AUD’s traditional role as the ‘higher risk’ currency within the G10, which left it out of favour in the recent market ructions

Rabo like AUD:

• Australia’s good fundamental backdrop
• Australia’s inflation outlook, this continues to imply that the RBA is one of the most hawkish central banks within the G10
• “Consequently, we maintain our 6-month forecast of AUD/USD 0.70”

“The hawkishness of the RBA combined with the underlying resilience of the Australian economy suggest that the AUD is likely to perform well, assuming market conditions normalize.”

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AUD update, daily candles:

This article was written by Eamonn Sheridan at www.forexlive.com.