Robert Rennie, Research Analyst at Westpac, points out that last week they stuck to a near term positive bias on AUD on the basis of an expected a lull in trade tensions; a reasonable pop higher in iron ore; a better than expected employment update and that AUD was trading well on crosses e.g. EUR/AUD.
Key Quotes
“We tend to see that story continuing near term, though the run of seven weaker than expected CPI outcomes certainly adds to the case for rates being on hold for a very, very long time.”
“However, with the Fed set to raise a total of 4 times by mid next year according to Westpac economics; no change from the RBA and iron ore export volumes set to rise into 2019, the case for a weaker AUD at least on forecast remains clear.”
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