A research note from Barclays on 19 February 2015; expects more RBA easing and a lower AUD
- Expecting a further cut from the Reserve Bank of Australia in May
- Sees risk that cash rate goes below 2%
- But base case remains low will be at 2%
- Then modest hikes in H2 of 2016
- Says the RBA cut because it is concerned about a relatively high exchange rate, a downgrade to its outlook, and an unstated concern about a new round of easing by other central banks (bolding mine ... spot on IMO)
- Forecasts AUD/USD at 0.7500 for Q4 of 2015
On New Zealand:
- RBNZ looks set for extended pause
- Risk of a near-term cut given inflation has unexpectedly eased in the face of solid economic growth
- But base case remains stable policy rate given house prices look to have shrugged off higher rates and a cap on risky mortgages
- Forecasts NZD/USD at 0.6800 for Q4 of 2015
