AUD TWI is in the middle of its range since March, which doesn’t seem noteworthy except that the RBA this week was relaxed enough about its level and outlook that it felt the need to drop the longstanding warning about the dangers to the economy of AUD appreciation, notes Sean Callow, Research Analyst at Westpac.
Key Quotes
“Australia’s low key calendar keeps the focus offshore, especially on US-China trade tariffs. Given AUD has appeared to be more sensitive than most to such headlines, any AUD/USD rallies to the mid-0.74s should struggle. Softer commodity prices also don’t help.”
“But the Aussie should already be pricing considerable risk over trade battles and ongoing RBA optimism leaves markets still pricing the next move as a hike. A neutral weak for DXY points to AUD/USD 0.7300 holding for now, but with risks of a range break tilted lower.”
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