The cross-fire that had hit the Australian Dollar throughout August (combination of high US rates and plummeting Chinese sentiment) has not ceased since the start of September. Economists at ING analyze AUD/USD outlook.
Moving ahead, we expect the US growth/Fed easing, and in turn, the global USD story, to be the key driver of AUD/USD. This is not to say that China will be put on the backburner, but a lot of the deterioration in Chinese growth is already priced into AUD, and things may gradually improve from here with monetary and fiscal stimulus being deployed in Beijing.
AUD/USD may still be searching for its bottom, but we still like a strong recovery into the new year, in line with USD decline story.
AUD/USD – 1M 0.63 3M 0.65 6M 0.68 12M 0.72