AUD: Benefitted from factors weighing on the USD - Westpac

The Aussie this week benefitted from factors weighing on the US dollar as AUD/USD is up around 1.6% over the past trading week while commodities have been mostly neutral, explains Martina Song, Research Analyst at Westpac.

Key Quotes

“Market pricing for an RBA hike by next Aug seems too optimistic. Former RBA board member Edwards has also pointed out that the RBA’s third objective – the economic prosperity and welfare of the people of Australia – “gives quite a lot of wiggle room” to the RBA to keep policy unchanged.”

“We still have a puzzling domestic picture, with business and consumer confidence diverging. The cautious consumer may weigh on AUD in the months ahead, however short term, the Aussie should benefit from further US dollar weakness.”

“AUD/USD technically remains in an uptrend since early May and is testing recent highs. It should struggle around 0.7750 though, a level which has capped.”