AUD/USD months-ahead view – below 0.59

  • outlooks for their respective main commodities, posing downside risks over the medium term
  • Oil prices have plunged over the past year, partly due to excess supply, but also due to a dire economic outlook
  • metals tend for follow (or co-move with) oil
  • iron ore prices have help up … mainly due to supply bottlenecks .. Once those have been cleared, there’s potential for iron to more closely reflect the deterioration in demand. So too for coal
For the AUD
  • multi-month, we hold a negative bias … targeting as low as 0.59.