From the excellent Tim Toohey at Goldman Sachs:
“Our bearish Australian dollar forecast is underpinned by expectations that US data weakness is transitory, headwinds to Australian growth are intensifying, the next phase in the decline in the terms of trade has commenced, and capital flows are turning less supportive”.
“Geopolitical risks and ongoing concerns over the impact of tightening Chinese financial conditions together risk a more immediate downward adjustment in the Australian dollar.”
GS cut the three month forecast to 85 cents from 90 cents, six month from 88 cents to 82 cents and 12 month from 85 cents to 80 cents.
I’m not so bearish now!