BarCap: AUD/USD fundamentals
According to analysts at Barclays Capital, the depreciation of Australian dollar is caused by factors that have supported this currency during the recent years:
- Higher interest rates (the RBA has been cutting rates and retains easing bias) – Australian yields are no longer that attractive for investors.
- Chinese economic growth declines and so does Chinese demand for Australian exports.
- Commodity prices have continued to go down in recent months – another blow to Australia’s exporters.
- Demand for Australian debt as a safe haven declined.
- Australian monetary authorities clearly expect a weaker national currency and keep saying that AUD rate is about 15-20% overvalued.