AUD/USD stabilises above 0.63. Economists at Rabobank analyze the pair’s outlook.
Evaluating higher for longer
While the market has not ruled out another hike by the RBA, interest rate differentials have been a key factor in pushing AUD/USD lower since July as the market finally adjusts to the higher for longer mantra from the Federal Reserve.
Concerns that slower growth in China will feed back into its major trading partners are also a negative AUD factor, though iron ore prices have remained well supported after their spring dip.
In view of the strength of the USD, we see risk of a push lower to AUD/USD 0.62 on a three-month view.
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