HSBC Predicts AUD/USD To Reach 0.90 By End 2014

The Australian currency’s top forecaster is predicting an almost 9 percent drop by the end of 2014, exceeding the consensus outlook, as the Federal Reserve’s taper of stimulus policies will revive a faltering U.S. dollar.

HSBC Holdings Plc, the most accurate at predicting the Aussie over the past four quarters in data compiled by Bloomberg, expects it to fall to 90 U.S. cents by Dec. 31 and 86 cents by the end of 2014 from 94.22 at 5 p.m. yesterday in Sydney. The currency climbed last quarter by the most since 2011, prompting economists surveyed by Bloomberg to raise their end-2014 forecast to 89 cents from 88 as recently as Sept. 18.

“The markets got a bit more excited about Aussie recently, but we don’t share that enthusiasm,” David Bloom, the London-based global head of currency strategy at HSBC, said by phone on Oct. 4. “The Aussie will continue to fall slowly but surely as the resurgent U.S. dollar sweeps all in its wake, driven by an eventual tapering by the Federal Reserve.”


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu