This from Westpac morning note today, a good summary of the inouts on the AUD and a view on where its going
AUD/USD 1-3 month:
- The resilience of US equity markets to the distractions of the Trump administration is a positive backdrop for risk-sensitive AUD.
- Chinese markets are of course less helpful as the deleveraging push continues, but the uptrend in steel prices suggests potential for recovery in iron ore prices.
- The rebound in Australian job creation keeps RBA rate cut talk at bay. This leaves scope for tests of AUD/USD 0.7550 near term. But multi-month, we expect the ongoing rise in US interest rates to chip away at AUD/USD, leaving it around 0.73 by Q3.
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On Friday I posted a heads up to the Q1 GDP-related data coming up over the next couple of weeks: AUD/USD traders - a quick heads up to the freak outs coming over the next 2 weeks
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ps. On that WPAC view above, add in what's going on with the spread between Australian and US yields (its continuing to narrow) - not AUD supportive either.
