UBS: trade idea for AUD/USD

In the medium-term, analysts at Swiss UBS still forecast the Reserve Bank of Australia to cut interest rates by 25 b.p. to 1.5% in August, pulling the real rates down to zero. Along with the Federal Reserve hiking twice in the second half of 2015, this spread narrowing should help AUD decline further to 0.6800 by the year end.

The pair could fall to 0.7000 by the end of the second quarter, analysts warn.

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