AUD Q4 2017 forecast revised higher, but outlook remains bearish – Morgan Stanley

Analysts at Morgan Stanley have upgraded their AUD price-forecast for Q4 2017, but retained relatively bearish outlook for the currency.

Key Quotes via Livesquawk:

“We revise up our forecast for the AUD to 0.70 by 4Q17 (from 0.65), but retain our relatively bearish outlook for the currency.”

“Our upward revision reflects a marking-to market of the continued rally in bulk commodities, which we believe has been a key factor behind the appreciation of the currency since year-end.”

“Meanwhile, tightening front-end rate differentials still represent an opposing force, pulling the AUD lower.”

“We believe this will continue to be the case, given substantial slack in the Australian labour market and a weak outlook for housing, which means the RBA is unlikely to tighten policy any time soon.”