AUD: Stay cautious, especially against its major European peers - Nomura

Peter Dragicevich, Research Analyst at Nomura, explains that the muted follow-through and price action in AUD following the upside surprise in the April Australian labour market report further solidifies their cautious view on the currency, especially against its major European peers.

Key Quotes

“The sluggish USD performance and political concerns in the US are muddying the waters slightly with respect to AUD/USD, but in terms of key crosses such as EUR/AUD and GBP/AUD we believe the uptrends remain in place. On a relative basis, we continue to see AUD shackled by various factors, with the more enduring and positive changes continuing to come through on the other side of the ledger.”

“Given the recent speed of the ascent, some consolidation in EUR/AUD is inevitable, but we favour buying on any near-term dips down towards 1.4800 and continue to project a move up towards 1.53 into end-Q2. Additionally, we hold a long GBP/AUD position as one of our key trades.”