Sean Callow, Research Analyst at Westpac, suggests that the Aussie has outperformed their call last week for more range-trading, though it was going nowhere until the big surprise on GDP on Wed, which was not indicated by any of the preceding partial surveys.
Key Quotes
“Had the global mood been grim, then the AUD rally would mostly likely have been wiped out, dismissed as old news. Instead it was the catalyst for AUD/USD to close above the 200dma for the first time since Sep 2014. This will obviously encourage trend-followers near term, with no particular barrier before the 0.7380/85 area which has held since Aug 2015. But 0.7400 may well cap this wave, with the GDP data having limited impact on pricing for another RBA rate cut (100% priced by Oct). We probably need a real change of mindset on China’s economy for 0.75+, not something we can expect in the week ahead.
Event risk: After Friday’s Jan retail sales, the calendar becomes light in terms of data likely to have a notable impact on AUD. Still, there is worthwhile information in Feb NAB business confidence (Tue), Mar Westpac MI consumer sentiment (Wed) and Jan housing finance approvals (Wed).”
(Market News Provided by FXstreet)
