Fundamental Australian Dollar[1] Forecast: Neutral
- The Australian Dollar remains quite unloved
- It is likely to stay that way for as long as interest rates so clearly favor the greenback
- However there could be scope for a little Aussie fightback now if risk appetite doesn’t crack
Find out what retail foreign exchange traders make of the Australian Dollar’s prospects right now, in real time, at the DailyFX Sentiment Page[2]
The Australian Dollar heads into a new week in perhaps one of the strangest positions besetting any widely-traded currency.
Its low point for the year against the US Dollar[3] remains uncomfortably close for the bulls. All the same, AUD/USD[4] last week breached the downtrend that had dominated for nearly all of 2018, thanks to strong domestic trade data and some broader weakness in the greenback.
So where next? Well, the Reserve Bank of Australia will give its November monetary policy dispensation on Tuesday, in the biggest local economic event of the week. The RBA does not often provide much succor for its currency these days, and that’s unlikely to change on Tuesday.
Indeed rate futures markets still don’t price in any chance of a change to the record low 1.50% Official Cash Rate either this year or through all of next.
Moreover, with the most recent official inflation data [5] showing last week a deceleration back below the RBA’s target band, there seems little chance of anything but another very dovish accompanying statement from Governor Philip Lowe. Not much chance of support for the Aussie here then.
