CIBC on the RBA and AUD, call it to 0.70 by year end, but note risks

Commentary on the AUD from CIBC, this via eFX

The RBA eased policy a week ago cutting interest rates for the second time this year. But by signaling that this may be it for now the Aussie dollar actually appreciated afterwards. Of course, that initial reaction could reverse, particularly if the Fed starts getting closer to hiking again.

However, history suggests that typically the initial reaction to an RBA cut, whether it be appreciation or depreciation tends to stick.

That suggests some upside risk to our call for AUDUSD to fall to 0.70 by the end of the year.