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The Australian dollar was hit by the RBA, but this is not the only thing in play:

Here is their view, courtesy of eFXnews:

Last week, we discussed the prospects of market conditions gradually turning less favourable for Asian currencies going into May.  Indeed,  the USD has turned around, as the “Sell in May” seasonal phenomenon is seemingly unfolding in Asia. High frequency data are showing signs of exhaustion of portfolio inflows into Asian markets , with Taiwan and Indonesia already seeing a pickup in outflows.

With the deterioration in risk appetite, high beta currencies such as the AUD, KRW and MYR have underperformed.  Specifically, our seasonal analysis shows that the AUD has the most bearish month of the year relative to USD in May. At the same time, increased market expectation of another RBA rate is further adding pressures on the AUD (Figure 8), after the RBA lowered its 2016 underlying inflation forecast to 1-2% from 2-3%.

We see more downside potential for AUD ahead,  especially with China upcoming data likely to confirm moderating activity in April.

Indeed, China’s macro data will take centre stage, with implications for global risk sentiment and the Antipodean and EM Asian currencies.  We expect China’s data to confirm activity moderation in April, in line with the signals from the manufacturing and services PMI reports (official and Caixin series). China’s export growth moderated in April after a bump in March, and we think money supply and new loans (expected release 10-15 May) will similarly slow after a sharp rise in March (Barclays: CNY 1200bn for aggregate financing; last: CNY 2340bn).

Consensus expectation is for April industrial production to soften as well (Saturday). China’s CPI Inflation (Tuesday) is to edge up to 2.4% y/y due non-food items, which, along with the rapid credit expansion of late, may at the margin lead to increased cautiousness of the PBoC in further relaxing monetary policy.

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