AUD/USD further pullbacks likely – Danske Bank

By FXStreet According to Arne Rasmussen, Chief Analyst at Danske Bank, the Aussie dollar could grind lower in the next months.

Key Quotes

“This morning, the Reserve Bank of Australia (RBA) cut the policy rate 25bp to 1.75%. In the statement, the RBA goes through the various factors rationalising the rate cut”.

“The comments on a too strong AUD complicating the economic adjustments were unchanged”.

“It appears that the very low inflation print late last week has been the trigger for the cut”.

“The economic prospects suggest that the RBA could cut again at a later stage in 2016 – especially given the lagged AUD headwinds looming where a cut in Q4 is possible”.

“AUD/USD has fallen sharply on the announcement but given that the cut was only 50% priced we see further downside near term”.
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Source:: FX Street