“Assuming China reopens next year and Australian energy export prices hold firm, we would expect the AUD to outperform both the pound and the euro,” they say. Rabobank analysts.
AUD is less susceptible to speculative flows
“Weaker global growth can traditionally be associated with a softer AUD. The Aussie has previously behaved as the ‘risk on’ currency within the G10 basket. This profile is rooted in the currency’s commodity linkages (considered as a proxy for growth), the country’s previously relatively higher interest rate profile, and its long-running current account deficit.”
“The interest rate differential is no longer as steep and Australia is no longer running a current account deficit, which probably means the AUD is less susceptible to speculative flows.”
“We expect GBP/AUD to pull back towards 1.67 by the middle of next year and EUR/AUD to fall below 1.50 in 6 months.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
