Sean Callow, analyst at Westpac, points out that last week they have noted the potential support for the Aussie from a steady RBA hand against a backdrop of a spec market already quite short.
Key Quotes
“GDP was right on the median forecast but there was still some short-covering after talk early in the week of a negative q/q change.”
“These factors plus unexpected conciliatory headlines on Hong Kong and US-China trade talks helped AUD top the G10 over the week, up 1.3% vs USD to probe the 0.6820 area that proved difficult in early August. It remains short of the 0.6865 level prevailing before the 1 Aug Trump tweet announcing new tariffs on China.”
“We have to wait until 19 Sep for the next key data – Aug labour force. This leaves AUD taking its cues in the week ahead from the global mood, though again we note that mid-Sep is when there should be the most market focus on outsized resource company dividend payments to AU share holders.”
“Risks for the next trade-related tweet seem tilted to the bearish side so we opt for neutral AUD on the week, but back to 0.67 or lower over 1 month.”
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