From ABN Amro via Forexlive:
Expect the RBA to lower the Official Cash Rate by 25bp in September (previously August).
In our view, the RBA remains concerned about the slow rebalancing in the economy, the recent decline in iron ore prices and the still relatively strong exchange rate. However, the RBA prefers to take a more cautious approach given financial leverage risks.
We expect economic growth to slow in the second quarter and recent measures announced by the Australian Prudential Regulatory Authority to cool house price inflation and address leverage risks
We also expect business investment data to be released on 27 August to remain weak which should warrant further monetary stimulus sooner than later.
As financial markets have not fully priced in a 25bp rate cut in Australia and are underestimating the magnitude of rate hikes in the US, we have lowered our Q3 and Q4 AUD/USD forecast to 0.72 (from 0.73) and 0.70 (from 0.72). We have also lowered our 2016 year end forecast to 0.64 (from 0.66).
Not bearish enough! MB retains a 60 cents forecast for next year with multiple rate cuts and a 45 cents outlook the end of cycle trough.
Meanwhile, today the battler is getting back slammed: