Economists at TD Securities believe that the Australian Dollar has already priced bad news and expect Aussie to gain ground against Dollar bloc peers next year.

Re-emergence to value next year is supportive for AUD

“Slowing global growth weighed down by reduced commodity demand leaves AUD still in a slog. But, we think bad news is almost fully in the price, especially as Australia holds a relatively favourable trade balance position that may become important as commodity supply chains shift.”

While China re-opening is not our base case, AUD would be the foremost beneficiary given macro and equity linkages.”

“A re-emergence to value next year is also supportive for AUD. We see scope for outperformance against Dollar bloc peers, especially vs. CAD.”