Australia: AAA rating is a passing trend - ANZ

Research Team at ANZ, notes that the AUD has performed better than expected over the past couple of years, with investors having been far more forgiving of the economy’s broader vulnerabilities than in past cycles.

Key Quotes

“This may have been driven by a heightened focus on sovereign ratings. We think that this phenomena is temporary, and when one looks at the AUD though a broader lens, it remains very vulnerable.

That said, picking the timing of a sentiment shift is often challenging. As such, rather than waiting for it to manifest we recommend selling AUD against the NOK – a far cheaper AAA commodity currency, where fundamentals appear to be more structurally resilient.”