Analysts at Westpac explained that after barely threatening to break out of its 0.73-0.75 prison for about 8 weeks, AUD/USD early last week printed lows dating to Jan 2017, as markets fretted about potential contagion from the Turkish lira’s steep slide. Key Quotes: “Signs of pressure around the globe included a record low on the Indian rupee, 2 year lows on the South African rand, pledges by the central banks of Indonesia and the Philippines to stabilize their currencies and FX regulation changes in China to support the yuan. Amid such jitters, AUD/USD fell to lows just above 0.72 on Wednesday. This is a reminder of AUD’s risk sensitivity – indeed the correlation between global equities and AUD/USD has tightened this year. This could be partly due to the lack of debate over the RBA outlook, which continued last week – wages, business & consumer confidence and unemployment data had little impact on AUD. Markets price 0% chance of the RBA changing rates before February 2019. Indeed even the AUD/USD bounce following the July labour force data (where total employment dipped -4k but the unemployment rate slipped to 5.3%) looked to be driven by a rebound in the Chinese yuan and the announcement of US-China trade talks this week, rather than the Australian data. The Chinese yuan recovery seemed to be driven by active policy measures, with USD/CNY falling short of the reported line in the sand at 7.00. But there was also an improvement in global sentiment as the Turkish lira recovered some lost ground, the euro priced in less contagion from Turkey and fears of deeper US-China trade wars ebbed. This week’s visit to Washington, DC by a Chinese delegation is clearly designated as a second-tier meeting but in Friday US trade, AUD and equities bounced on reports that plans are being formed to bring the US and China together on trade policy ahead of the APEC and G20 meetings in November. Australia’s calendar isn’t likely to be pivotal for AUD this week but is still worth noting. Q2 construction data will help shape forecasts for the always important GDP report, due on 5 September. Aside from trade talks, the key event this week is Fed chairman Powell’s keynote speech at the annual economic symposium in Jackson Hole, Wyoming. Market pricing for another Fed hike on 26 September is around 90%, for a total of 40 basis points priced in by year-end. This has not moved over the past week but clearly there is scope for markets to lean either way on the December meeting. Westpac expects rate rises in both Sep and Dec, for a funds rate of 2.25-2.50%, boosting the premium over Australia’s 1.5% cash rate. Commodity prices are more supportive for AUD – metals prices are struggling but coal and iron ore are on a firmer footing.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next USD/CNY: Trade talks and counter-cyclical measures – Commerzbank FX Street 3 years Analysts at Westpac explained that after barely threatening to break out of its 0.73-0.75 prison for about 8 weeks, AUD/USD early last week printed lows dating to Jan 2017, as markets fretted about potential contagion from the Turkish lira's steep slide. Key Quotes: "Signs of pressure around the globe included a record low on the Indian rupee, 2 year lows on the South African rand, pledges by the central banks of Indonesia and the Philippines to stabilize their currencies and FX regulation changes in China to support the yuan. Amid such jitters, AUD/USD fell to lows just above 0.72… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.