14 Oct 2013
Flash: AUD/USD to follow mild downward path next 5 years - Societe Generale
FXstreet.com (Barcelona) - AUD/USD will tend to oscillate around current values with a mild downward path over a 5 year horizon, according to Sébastien Galy, FX Strategist at Societe Generale.
Key Quotes
"AUD remains clearly overvalued along a wide array of long-term metrics, giving it a downward bias. More importantly in the nearer term, we see Australia’s terms of trade declining over time as commodity prices are more likely to ease than to rise (capacity, and our below-consensus China view)."
"In addition, the rate differential between US and Australia is likely to shrink. We present alternative paths for AUD/USD depending on scenarios for the Chinese and US economies."
Probability Chart
Key Quotes
"AUD remains clearly overvalued along a wide array of long-term metrics, giving it a downward bias. More importantly in the nearer term, we see Australia’s terms of trade declining over time as commodity prices are more likely to ease than to rise (capacity, and our below-consensus China view)."
"In addition, the rate differential between US and Australia is likely to shrink. We present alternative paths for AUD/USD depending on scenarios for the Chinese and US economies."
Probability Chart
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