AUD/USD likely to trade around 0.75 by end-2017, says Scotiabank

In recent weeks, the Australian dollar has depreciated against the U.S. dollar along with its commodity peers, such as the Canadian dollar. In spite of Australia’s growth outperformance, a weakened price outlook for its commodities and narrower Australia-U.S. interest rate differentials are set to keep the Australian dollar trading sideways. According to a Scotiabank research report, the AUD/USD pair is expected to trade at around 0.75 by the end of this year.

Meanwhile, the nation’s top sovereign credit status is at risk. Standard & Poor’s has kept a “negative” outlook on Australia’s “AAA” rating since July 2016. The rating agency continues to be negative regarding the Australian government’s ability to close the existing budget deficit by the fiscal year ending in mid-2021. In the meantime, Moody’s and Fitch have maintained their rating with a stable outlook.