ANZ say further easing from the Reserve Bank of Australia next year would send the Australian dollar lower
- maybe to 0.65
- ANZ say the RBA might ease even more to address spare capacity in the economy
"A decision to hold policy is likely to set the AUD on a path higher; while easing, amid a more stable global picture, would set Australia apart and is likely to have an outsized negative impact on the currency"
ANZ outline what to watch for the currency:
- external - positives would be trade conflict cooling, improving confidence in global growth
- local - consumer and business confidence (both unimpressive, response to the stimulus from both has been disappointing
With just 65% likelihood of one cut priced in over the next 12 months, we think the market is vulnerable to the RBA remaining dovish, and we continue to expect a new low in the AUD in early 2020
