AUD: Seasonality or coincidence? – Nomura

Peter Dragicevich, Research Analyst at Nomura, explains that AUD/USD has fallen repeatedly in May over the past few years and some participants are quick to suggest “seasonality”, but a deeper analysis illustrates there has been a run of macroeconomic developments that have driven the moves.

Key Quotes

“This has included a narrowing of the Australia-US two-year swap spread, sharp falls in commodity prices and a stronger USD on either geopolitical or US Fed-related factors. We do not expect this to occur in 2017. We look for AUD/USD to consolidate, but for AUD to underperform other key crosses, such as EUR/AUD.”