More Aussie bulls from the AFR:
DZ Bank, the most accurate at predicting the Aussie in the four quarters through June as measured by Bloomberg Rankings, is joined by third-ranked Citigroup in projecting the Aussie will end 2014 at US96¢ from US93.87¢ as of 5 pm Tuesday in Sydney.
The median estimate of more than 50 analysts surveyed by Bloomberg is for a 4.1 per cent slide to US90¢ by December 31.
…“I’m still a big fan of the Aussie dollar,” Dorothea Huttanus, a Frankfurt-based senior analyst at DZ Bank, said in a July 7 phone interview. “The next step for the RBA will certainly be a rate hike,” she said, adding that it could come as soon as the first quarter of 2015.
Citigroup predicts the local currency will rise to US96¢ by December 31 and policy makers will start raising rates in the second quarter of next year.
…Valentin Marinov, London-based head of European Group of 10 currency strategy at Citigroup, said by phone on July 7. “The RBA may have to try a bit harder if they really want to engineer the next leg lower, especially in an environment where every other central bank is trying to do the same.”
I’m sorry, peeps, but the RBA is not going to hike rates any time in the next year, especially not if the Aussie is anywhere near 96 cents. DZ is either wrong or is long and counter-jawboning Captain Glenn.
There are two more points to consider. If housing keeps running away it will be macroprudentuial next and, I suspect, by year end.
As well, on current settings, China’s little growth pulse is going to fade again in Q4. Mini-stimulus does not last more than a quarter or two, especially against a backdrop of a fading property market.
That’s not to say that my own dovishness for an October cut and low 80s isn’t a bold call. It is. But this bullishness is either self-serving or poorly reasoned.
