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The Aussie was stopped out of our short on the pop above 0.6600 but can’t see the case for sustained further gains while China’s trade threats to Australia are having a major impact, per Westpac. OCBC Bank prefers to short the AUD/USD pair after the retreat from the 0.66 level.

Key quotes

“China announced 80% tariffs on Australian barley imports, alleging dumping. This followed a partial ban on Australian beef imports and of course the Chinese ambassador to Australia’s threats to a range of Australian exports.” 

“There is no disputing the economic pain of barley growers and beef producers but iron ore remains Australia’s dominant merchandise export to China and this week spot prices reached highs since Aug 2019 as Brazilian supply faltered.”

“Global risk appetite still threatens AUD/USD multi-week but near-term we can’t rule out another push above 0.66.”