BNP Paribas: 5 reasons to sell AUD
Analysts at BNP Paribas expect the Australian dollar to extend its bearish rout. Here are the five reasons why:
1) Australia’s basket of commodity prices has depreciated by 5% since June. Acording to the bank's quant model, this corresponds with a fall in AUD/USD to 0.6800;
2) RBA feels uncomfortable with the current AUD exchange rate on the back of the falling commodity prices;
3) Market has scope to price in a higher possibility of further RBA easing ahead of the next meeting on August 4;
4) Market will build more AUD shorts if the RBA easing will seem to be more likely;
5) Q2 CPI disappointed to the downside, coming at 1.5% y/y (consensus: 1.7%).