8 Dec 2014
AUD and NZD to remain under pressure – DB
FXStreet (Barcelona) - The Deutsche Bank Research Team notes that the narrowing rate spread due to rising US yields will keep the medium term outlook for AUD and NZD as bearish.
Key Quotes
“The medium-term picture is negative for AUD/USD, with the rate spread narrowing as US yields rise and the RBA cuts interest rates, and the trend decline in Australia's terms of trade expected to continue over coming years.”
“Over the second half of 2014, lower commodity prices and a less hawkish outlook for official interest rates have seen the NZD decline, though the exchange rate remains above long-run average levels supported by high relative interest rates. A narrowing interest rate spread as US yields rise should see NZD/USD fall further over the medium term.”
Key Quotes
“The medium-term picture is negative for AUD/USD, with the rate spread narrowing as US yields rise and the RBA cuts interest rates, and the trend decline in Australia's terms of trade expected to continue over coming years.”
“Over the second half of 2014, lower commodity prices and a less hawkish outlook for official interest rates have seen the NZD decline, though the exchange rate remains above long-run average levels supported by high relative interest rates. A narrowing interest rate spread as US yields rise should see NZD/USD fall further over the medium term.”