In view of Sean Callow, Research Analyst at Westpac, Australia’s stronger than expected A$3bn trade surplus in Sep (with positive revisions) helped AUD as it recovered from very subdued CPI data.
Key Quotes
“We have pointed out the strength of commodity prices for many weeks now, contrasting this to AUD weakness, especially Aug-Sep when domestic politics played some part. Perhaps this fundamental support for AUD will gain more traction near term. As the chart shows, while iron ore and coal remain Australia’s top 2 exports, LNG is accelerating rapidly.”
“The RBA should sound upbeat once again on Tue and in its forecasts due 9 Nov. US midterms are a wildcard for USD sentiment but if there is no fresh boost for USD then AUD/USD should be able to extend gains to the 50dma now at 0.7167 then to 0.7200. Patchy regional equity sentiment remains a threat to cap gains.”
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