AUD/USD: More fragile? - Westpac

Sean Callow, Research Analyst at Westpac, suggests that AUD/USD has been a little more fragile than they expected as the consolidation they looked for prevailed until Tuesday Sydney trade but after that, the pair printed fresh lows since June 2017, just above 0.7400.

Key Quotes

“Of course, Tue evening Sydney time was when Australia’s federal budget was being delivered. But the AUD/USD slide began pre-budget and was part of a broad US$ rally. It seems positioning is still not primed for renewed dollar gains, which implies a strong chance of new 11 month lows to about 0.7375/90 in the week ahead. AUD could do better on crosses though, especially NZD.”

“The local calendar is notable. But while markets will be fixated as usual on the jobs data, Q1 wages is surely more important for the RBA. This series will need to pick up soon if inflation is on track to return to 2.5%yr.”