AUD under performance can continue into 2018 - Nomura

Analysts at Nomura suggest that relative AUD underperformance has been one of their key themes in recent months, and they think this trend can continue into 2018.

Key Quotes

“There are two overarching drivers that should continue to undermine the AUD: (1) the ongoing monetary policy divergence between the patient RBA and other major central banks; and (2) the bias for a lower Australian terms-of-trade. The combination of moderating growth in China, push for supply-side reforms and deleveraging, and still rising global supply should weigh on Australian-centric commodity prices, such as iron ore. We remain long EUR/AUD, given our positive outlook for the Eurozone and flow dynamics and as the ECB continues to normalise policy.”