AUDUSD: Strategy Views from Credit Agricole

After a 2Y downtrend, AUD/USD looks as though it is turning the corner. The AUD-USD short-term rates differential has bottomed out. Our US economist forecasts that the Fed will begin cutting rates in Q324. The US will experience only a mild recession. Meanwhile, Australian inflation is proving more resilient. Australia’s policy rate is less restrictive than other G10 economies, so the RBA will be slower to cut rates.