AUD Gains More Intuitively Clear - BBH
Research Team at BBH, suggests that the Australian dollar's gains appear
more intuitively clear after the minutes from the recent RBA meeting
indicated that it was a close decision.
“This means that a follow-up rate cut next month is unlikely, which is what we have argued. While short-term participants may be surprised today, the medium-term outlook has not changed. It seems likely that the RBA may still need to ease monetary policy.
The resilience of the Australian dollar yesterday despite the disappointing data from China, and the follow through gains today, is notable. If it is sustained, it is likely signaling the end of this leg up in the US dollar, which began in late April against the Aussie and May 3 for most of the others. The Australian dollar's upside momentum eased in the European morning, so the key to the outlook may be the shape and magnitude of the pullback. Ideally, the Aussie holds above the $0.7280-0.7320 band.”