In our last commentary on the Australian dollar, we wrote that the currency was an enticing short opportunity thanks to slowing Chinese growth and a bearish trend. Specifically, we recommended shorting AUD/USD as means to express a bearish view on the currency. Since that time, the pair has weakened (from 0.7560), and is trading around 0.7280 on August 13.  Going forward, we see further...

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In our previous take on the Australian dollar in late February, we wrote that falling commodity prices, an ongoing slowdown in China, and weak domestic conditions (looking at both economic data and monetary policy expectations) were significant headwinds for the currency. Beyond economic indicators, quantitative signals also suggested that the bullish trend was running out of steam. We downgraded…

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We take a closer look at the Australian dollar forecast, and how domestic and international economic changes are set to impact the currency. From China's slow down to key domestic indicators that reveal slowing growth, we break down why we're changing our outlook on this commodity currency.

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For a currency that strengthens when global growth accelerates, recent moves in the Australian dollar have been fairly disappointing. While the currency rocketed higher between mid-December and late January, the Australian dollar has sold off sharply in recent weeks. The currency first began weakening against the Japanese yen, which led us to downgrade our short-term AUD/JPY outlook to neutral on…

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Looking at the latest COT report, there are new extremes in short Australian dollars and long euro positions. Long crude oil net positions continue to look fairly crowded. The US dollar remains out of favor, but positioning is not yet at a bearish extreme. Notable e…

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The Australian dollar outlook isn't looking too good. Hampered by a COT report, new extremes in short AUD positions are a marked change from the long positions seen in recent history, bolstered by Aussie reliance on Chinese exports. And from our AUD forecast, looks like there's still room to fall. 

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This is a big week for economic data and events in Australia. The two most important releases to watch include the RBA’s interest rate decision tomorrow and GDP growth on Wednesday. Despite rate hike hopes throughout the year, the RBA has militantly pursued a neutral monetary policy. As such, consensus continues to expect no change to the current cash rate of 1.5%. We have the same expectation, a…

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In the past few weeks, economic data releases from China have fallen below expectations. Earlier this month, non-manufacturing and manufacturing surveys from the China Federation of Logistics and Purchasing came in below previous figures, suggesting a weaker outlook for future growth. Earlier this week, fixed asset investment, industrial production and retail sales (from the National Bureau of St…

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For Australian dollar speculators, assessments of political risk are usually limited to developments within the country. Last month, the stability of the ruling government was called into question after the deputy prime minister and four senators were disqualified from holding office due to maintaining dual citizenship. Following Deputy Prime Minister Barnaby Joyce’s disqualification, the governm…

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Looking at the latest COT report, only the Canadian dollar remains in extreme territory. Following this week’s sharp decline in the Canadian dollar, the large position is likely to decline over the coming weeks. The euro and the US dollar are no longer in extreme territory as speculators build up their long US dollar positions. 

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