AUD/USD Topside Limited Around 0.7450 – Westpac
Strategist at Westpac Sean Callow sees the upside in AUD to find resistance in the mid-0.7400s in the near-term.
“The timing of another RBA rate cut will hang over AUD for some months, capping rallies”.
“But market pricing of about 20-25% chance for June, 100% by Oct and a 1.35% rate by Mar17 seems sufficient on current information”.
“The RBA will be braced for a low wages reading though a downside surprise such as 2.0-2.1% y/y would produce renewed AUD selling”.
“The jobs report is a lottery as usual though the RBA’s focus does seem to be inflation, not the pace of growth right now”.
“Commodity prices have lost some speculative froth but aren’t collapsing, leaving our AUD/USD fair value estimates in the high 0.70s”.
“We are neutral on the week, looking for AUD/USD to fi nd buyers in the 0.7261 (200dma) to 0.7300 zone, topside limited to the 0.7450 area”.