By Areena FxAfter reaching a peak around 0.6871 in late December, AUD/USD experienced a decline to 0.6500 earlier this month. Analysts at Rabobank delve into the outlook for the Australian dollar.
EUR/AUD Forecasted to Decrease to 1.5600 Over 12 Months
Initially, the Australian January Labor data suggested a cooling economy, leading to speculation about the Reserve Bank of Australia (RBA) potentially initiating the first rate cut of the cycle. However, policymakers are likely to wait for more economic data before making any decisions.
So far, the RBA has maintained a relatively hawkish stance compared to other G10 central banks, and Rabobank anticipates that rates will likely remain unchanged until the fourth quarter.
If the Federal Reserve cuts rates before the RBA, it could pave the way for AUD/USD to climb higher later in the year.
Reflecting on the Australian economy’s resilience compared to Germany, Rabobank also predicts that EUR/AUD will decline to 1.5600 over the next 12 months.