AUD/USD: Risk on another dip below 0.60 – Rabobank

It may be way too early for politicians and central bankers to start patting themselves on the back, but in Australia there may at least be room for the first sighs of relief, economists at Rabobank apprise.

Key quotes

“RBA Governor Lowe forecast that domestic output is likely to fall by around 10% over H1, with most of the decline taking place in the June quarter. In tune with this, he is expecting the unemployment rate to be around 10% in Q2.” 

“The RBA is looking for the recovery to gain a foothold in Q3 and sees the potential of a 6-7% y/y growth rate next year. There is scope for the jobless rate to remain above the 6% level through the next couple of years.”

“Australia’s large coal exports have linked the value of the AUD with the oil price. Given this backdrop, it is difficult to be optimistic about the outlook for the AUD.”

“We see risk on another dip below AUD/USD 0.60 on a 1 to 3-month view.”