Market news
23.05.2022, 07:06

AUD/USD to move downward in the months ahead – HSBC

The Reserve Bank of Australia (RBA) has turned more hawkish but with risks to the domestic outlook and slowing global growth, the RBA’s tightening path may still disappoint markets. The lack of positive catalysts offsets a potential downturn in risk appetite, which may lead to near-term AUD weakness, economists at HSBC report.

Potential downside ahead

“We think that the RBA is likely to be in ‘inflation fighting’ mode at least for the next few meetings, and expect 25bp hikes in June, July, and August, another in November, taking the cash rate to 1.35%.”

“Australia’s real wages are falling, which will weigh on consumer spending; the housing market is likely to cool more than previously thought and this, too, will weigh on economic growth. Considering also a backdrop of slowing global growth, we think it may be hard for the RBA to keep pace with the Fed. As such, we see AUD/USD declining in the months ahead.”

“Over the near-term, rebounds in risk appetite are likely to remain fragile amid persistently elevated geopolitical uncertainty and China’s COVID-19 situation. A hawkish outcome (i.e., a larger rate hike) at the RBA’s 7 June meeting also seems unlikely. Consequently, AUD/USD is vulnerable to a reversal lower.”

 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location