AUD/USD: Near term consolidation - Westpac

Sean Callow, Research Analyst at Westpac, notes that this week has produced lows dating to June 2017 for both AUD/USD and A$ TWI and so it has been a significant fall, though described by the RBA this week as having “depreciated a little.”

Key Quotes

“Our broadly bullish US dollar view for the week ahead argues for fresh 11mth lows on AUD/USD. But the lack of fireworks on the Aussie’s break of 0.7500 hints at some near term consolidation. Moreover, domestic news and data are supportive of at least an uptick on several AUD crosses.”

“The RBA is sticking to its view that growth will “average a bit above 3 per cent in 2018 and 2019.” A pre-election budget could reinforce such forecasts, with heavy hints of cuts in corporate and personal tax rates. The Mar trade report also augurs well for Q1 GDP on 6 June. So some decent two-way price action either side of US$0.75 seems likely.”