Commodity prices continue to argue for AUD dips to be shallow - Westpac

Sean Callow, Research Analyst at Westpac, suggests that at time of writing, AUD/USD is almost dead flat so far this week and ranges have tightened as markets wait for Jackson Hole and with little local news (construction data a touch disappointing).

Key Quotes

“Commodity prices continue to argue for AUD dips to be shallow, with iron ore lingering around $60/tonne and coking coal prices surging. While Australia’s Q2 GDP is shaping up as a little soft, the y/y rate should hold near 3% and leave no tension at all over the RBA decisions in Sep and Oct.

Our expectation that the Fed doesn’t encourage more aggressive pricing for a Sep rate hike should chip away at USD. This should help AUD/USD find buyers on dips towards 0.7550, with a return to the mid-0.77s our base case multiday/week.”