AUD/USD: Forecast revised lower, sub 0.80 end of 2015 - NAB

FXStreet (Bali) - NAB FX Strategists have revised the Australian Dollar forecast lower, now seen sub US 80 cents by end of 2015/early 2016.

Key Quotes

"Our FX Strategy team revised their AUD/USD forecasts lower. The key points are: “The speed with which the USD/JPY run-up has broadened out into a more generalised bout of USD appreciation, means that many of the levels for major US dollar pairs we thought would be achieved only in 2015, are being realised much sooner."

"We tentatively suggest AUD/USD could end this year in the 85-86 area, but the risk is clearly skewed towards a clean break below 85 in a continued stronger dollar environment. We also now suggest that the eventual low in AUD/USD will be below 80 cents (we forecast 0.80 in late 2015/early 2016 and a low of 0.78 in H2 2016)."

"Our expectation that Australia’s Terms of Trade will find a base above its long term average, and that a relative shallow Fed tightening cycle will be a restraining influence on the extent of ultimate US dollar appreciation, means we do not think the AUD will trade back to – or through – its historical post-float average of around 76 cents."