Analysts at Westpac, suggest that there has been considerable media and market focus on AU short end and the widening in funding spreads.
Key Quotes
“Previous widenings have corresponded with tightness in US Libor, but the current widening appears domestic in nature. While there are many other factors that determine mortgage pricing. With some smaller banks recently raising mortgage rates, we will be watching the RBA statement for any commentary on this phenomenon.”
“AUD/USD faces many headwinds near term: a resilient US$, EM FX under pressure, faltering commodity prices, an uptick in volatility. Even if CNY stabilizes, the Aussie still seems likely to print fresh lows since Jan 2017, say in the 0.7250-0.7300 area.”
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