Overnight the Aussie dollar came under heavy selling pressure after the Bank of Canada joined the chorus of central banks surprising markets.
At 0.8083 the Aussie is just 50 points off the recent low and ANZ currency strategist Daniel Been said, in a note to clients this morning, that the “AUD is spending its final days above 80 cents”.
Been says that the key to the move below 80 cents is that, “the BoC decision has relevant parallels to Australia – namely, a commodity-centric economy with growth slightly below-trend and an inflation pulse that is providing space for some additional easing.”
Soft data outcomes in Australia next week (business confidence and the CPI) will raise risks that the RBA will act sooner than the market expects, and implies the AUD won’t be above USD0.80 for much longer.
As a result the ANZ is reaffirming their forecast for the Aussie dollar to fall to 76 cents by the end of June this year.