MS: The Australian dollar may fall to 65 US cents

The Australian dollar may fall to its lowest level against the USD since the financial crisis, according to Morgan Stanley forecasts.
The Australian dollar may fall to 65 US cents in 2019, after the Australian central bank's interest rates are expected to fall below those in the US, according to Hans Redeker, an analyst at the bank.
As Australian interest rates fall below those of the US, the currency of the country will break its correlation with the other currencies of developing countries, says Redeker.
The weakness of the Australian currency will also be largely predetermined by competition coming from the currencies of developed countries that attract investor's interest as a source of security.
The additional interest rate of 10-year Australian bonds over that of 10-year US bonds was at 19 basis points yesterday after reaching the 16-year minimum of 15 basis points in June.
The last time the spread between the two interest rates was so small was in 2001, when the Australian dollar fell to 47.76 cents.

BNP Paribas: It's time to sell the Australian dollar

This month the Australian dollar again raise its price, however, as before, it failed to break through key resistance levels, and while its attempts to decrease remain limited, the dynamics of the pair shows a weakening of upward momentum, analysts said.
Analysts at BNP Paribas note that market participants in recent years have gained a strong track record of long positions and the positions of speculators close to important technical levels suggest the attractiveness of short positions in AUD/USD.
At the bank believe that the new period of decrease will also contribute to fundamental factors and announced the opening of short positions in AUD at 0.7695 with target 0.7400 and a stop at 0.7815.

Danske Bank: Bank of Australia may prevent further growth of AUD/USD

AUD/USD won back almost all the losses suffered after the victory of Donald Trump in the US presidential election. The demand in mid-December was due to the uncertainty of the economic plans of the new US administration, the strong macroeconomic data from Australia, upbeat comments from Bank of Australia, as well as higher commodity prices and good appetite for risk, analysts say.

However, they believe that the Australian central bank wants to limit the potential growth of the couple through verbal intervention in case of its further strengthening. In addition, in the coming months there may be an increase in interest rates in the US. Analysts' forecasts of the bank for AUD/USD for 1, 3, 6 and 12 months, are respectively, $ 0.75, $ 0.73, $ 0.74 and $ 0.75.

The dollar fell after Trump fired Attorney General

The dollar has fallen in price on Tuesday during the Asian trading session, after yesterday the US president Donald Trump fired the Acting Attorney General Sally Yates, who ordered the Ministry of Justice lawyers not to embed Trump's ban on immigration, and the Bank of Japan left policy unchanged, as expected, but raised its forecast about growth.
Trump has appointed Dana Boente, Attorney for the Eastern District of Virginia, to the position of Yates, the White House press secretary Sean Spicer wrote on Twitter.
USD/JPY was trading at 113.56, down by 0.18%, while AUD/USD rose by 0.13% to 0.7565. The US Dollar Index, which shows the strength of the dollar against the trade-weighted basket of six major currencies, fell by 0.08% to 100.34.

The Australian dollar fell because of the GDP data

The Australian dollar fell on Wednesday during the Asian trading session, as Australian GDP shrank in the third quarter.
AUD/USD was trading at 0.7431, down by 0.40%, and the USD/JPY rose by 0.12% to 114.16.
The US Dollar Index, showing the strength of the dollar against the six major currencies, was up by 0.01% to 101.52.
In Australia the day is rich in fresh indicators. Thus, the index of activity in the construction sector from AIG rose from 45.9 in November to 46.6, and in the third quarter GDP fell qoq by 0.5% and grew year on year basis, while it was expected to grow by 0.3% and 2.5% respectively.
Reduction of GDP, the highest since 2008, is one of the biggest deviations from the forecasts of the Reserve Bank of Australia's history. RBA, according to the calculations of economists expect GDP growth somewhere at 0.5%. Although officials expect that GDP will retrace in the fourth quarter, the lowest rate will attract the attention of traders to the report on the state of the labor market and definitely will soften the current neutral position of the central bank.

Deutsche Bank: It's time to sell the most overvalued currency in the world

Currency strategists at Deutsche Bank, who already have in their portfolio short positions in Australian dollar against the Canadian, think it's time to consider selling AUD against the US Dollar.
Changes in the technical picture confirms the inability of the bulls to take advantage of this initiative, while improving the economic prospects of the United States after the victory of Trump and negative signals from data from Australia showed that the fundamental picture favors lowering. At Deutsche Bank paying attention to the weakening of wage growth in Australia and the general deterioration of the situation on the labor market in the country, which in the opinion of the analysts of the bank will cause the Reserve Bank of Australia to lower interest rates again in the first half of 2017.
In addition, DB doubt the recent rally in commodity assets as the bank's strategists do not believe that the movement reflects the real situation in the economy and therefore do not believe in its stability.
DB's analysts do not expect a noticeable improvement of the situation with the trade balance in Australia and also remind about the risks of China, which continue to maintain a policy of gradual devaluation of the yuan. From the bank also advise not to forget that with the arrival of Donald Trump at the White House it could be expecteda  deterioration in the trade disputes between the US and China.
At the bank believe that in given circumstances from the Australian currency can be expected a resumption of downward momentum, as the Australian dollar could be called the most overvalued currency in the world.

The dollar is growing, but may show weekly decline

The dollar strengthened on Friday, but may show weekly decline against other major competitors, as investors doubt the possibility of raising the Fed rate in the current year.
Major currencies traded in narrow ranges, except for the Australian dollar, which dipped 0.9 percent as ratings agency Moody's downgraded the ratings of Australian banks.
Market's attention this week has been mostly focused on the mixed signals by the US Federal Reserve. Minutes of the last meeting of the regulator showed on Wednesday that the Fed heads view on the imminent rate hike has divided.
"The market generally believes, that the Fed will not raise rates in the near future, therefore the dollar in the short term remains vulnerable." - Said Lee Hardman of Bank of Tokyo-Mitsubishi.
The dollar index, which tracks the currency's value against a basket of six major currencies, to 12.28 UTR rose by 0.38 percent to 94.517, but shows weekly decline. Thursday's index slipped to 94.077, the lowest level since June 23.
Euro fell by 0.29 percent to $ 1.1320, for the week strengthened against the US currency, the yen fell by 0.41 percent to 100.28 on Tuesday after reaching a maximum of eight weeks at 99.55 yen.

Overview of AUD/USD

After the strengthening of AUD/USD, sellers have intensified. But their activity is reduced by the weakening in prices. This may due to the fact, that the pair is approaching important 0.7660 support level, which is a "mirror-level" on a large time period. The significance of this level of support is difficult to identify. Given all this, for the continuation of the downward movement, sellers need a fairly powerful driver of growth of the US dollar.
In fact, the absence of a driver is another reason for the decline in sellers activity. As we can see, the technical factor (strong support) and the fundamental (no fundamental reasons for the substantial strengthening of the US dollar) does not allow to count on a decrease in quotations of the pair.
Friday's weak US data, which is negative for the US dollar, should be positive for the pair.
A break of 0.7690 resistance could lead to another wave of strengthening for the pair, while the breakdown of 0.7625 support could be the first signal of the ability of sellers to continue to decline further to the base figure.

The Australian dollar rose after the central bank meeting

The Australian dollar rose after the meeting of the Australian central bank, which left interest rates unchanged. The institution did not take changes in monetary policy, leaving the base rate unchanged at a record low of 1.75%. The Australian dollar was among the best performing currencies after hitting 0.7458 - the highest level since May 6. The Australian currency rose one percent against the euro and the yen.
The British pound managed to recover after reaching earlier 3-week low against the dollar. The reason for the good performance were two polls that give priority to the supporters to remain in the UK in the EU. This is in contrast with the results of Monday when the majority of respondents supported the country's exit from the EU. The British pound rose one percent against the dollar, reaching 1.4574. Investors and politicians warned that the eventual exit of Britain from the EU could hit the global economy and financial markets.
The dollar teetered about its direction around the 4-week low as investors speculated about when will be the next increase in interest rates.
The dollar index, showing the performance of the greenback dropped to 93.874, holding near 4-week low at 93.745.

Strong data on exports may force the Australian Central Bank to wait with the increase in interest rates

The strong recovery of Australian exports in the previous quarter, helped fill the gap resulting from the reduction of industrial investments and becoming yet another argument in favor of maintaining the unchanged policy of the central bank at a meeting next week.
Net exports are likely added 1.1 percentage points to GDP growth in Australia worth $1.2 trillion. GDP data for the first quarter will be published on Wednesday.
The data from the Australian Bureau of Statistics on Tuesday showed that exports jumped by 4.4 percent, while imports decreased by 0.8 percent. Analysts forecast was for growth in exports by 0.7 percent.
Strong data shook the market's expectations of a new cuts in interest rate this year and pushed the Australian dollar to a peak of A$ 0,7240.
The data for a steady growth give the Reserve Bank of Australia time to wait and see if inflation is restored before deciding whether another reduction in rates is necessary.

The euro with a decline in anticipation of data on Friday

On Thursday, EUR/USD decreased, erasing gains from the previous day. The currency pair was traded between 1.1369 and 1.1429 before settling at 1.1376, registering a decline of 0.42%.
The British pound ended almost unchanged against the US dollar, though it was traded in a wide range between 1.4528 and 1.4405, ending the day at 1.4448. BoE did not brought surprises and left its main interest rate unchanged at 0.5%.
The pair USD/JPY rised to 109.01. Purchases of dollars against the yen resumed amid readiness of the Japanese Central Bank to intervene in financial markets.
The Australian dollar finished lower against the US money and AUD/USD closed at 0.7324 while NZD/USD closed unchanged at 0.6812.
On Thursday, gold futures fell, ending the session at $1263,29 per ounce.