The Q3 GDP report emphasises that the domestic economy remains weak ahead of a sharp decline in mining investment. With further fiscal consolidation on the cards we therefore believe that the RBA will cut rates again, partly aiming for a weaker AUD to help rebalancing the economy. Thus we expect a new 25bp rate cut in Q1 2014 (likely in March).
Against this background, we have lowered our AUD forecast.
Read the full report: Market Research
Nordea