Forex Flash: AUD/USD bearish ahead of RBA cut tomorrow - UBS

FXstreet.com (Barcelona) - "In the week ahead the central banks of Australia, New Zealand and Canada all meet," says Head Foreign Exchange Strategy at UBS Macro Research Mansoor Mohi-uddin, who expands: "We expect the Reserve Bank of Australia will be the only one to change policy, cutting its benchmark interest rate by 25bps to 3.00%. This follows the latest RBA minutes suggesting that further easing was likely. That keeps us bearish on the Australian dollar. But we also think the structural picture suggests the currency will clearly peak against the US dollar now," the analyst adds.

Among other reasons behind, Mr Mohi-uddin explains: "The latest quarterly capital expenditure report is key here. It showed a record 'fourth estimate' downgrade for investment plans for the current financial year from A$179.3bn to A$173.4bn. This is crucial as it shows Australia's mining investment boom is now peaking. This has boosted GDP by 7-8% points over the last few years, a major positive shock to the economy," Mansoor concludes.