The main focus will be on the release of the RBA meeting minutes. They should confirm a somewhat more cautious stance when it comes to a higher currency’s tightening impact on monetary conditions.
Considering capped rate expectations, it will be down to external factors to drive the currency. Even if risk sentiment has more room to improve, we believe that there is only limited scope of policy differentials diverging further, at least when it
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In the short term we do not rule out more upside risks. However, elevated long positioning and limited room for rising rate expectations should prevent the currency from appreciating more considerably.