AUD: Under pressure from RBA - Westpac

AUD has been the second worst performing G10 currency after the Japanese yen, down 0.5% over the past week as losses were mainly accumulated due to the neutral RBA statement, according to Martina Song, Research Analyst at Westpac.

Key Quotes

“The main catalyst for the turn in AUD was the mostly neutral RBA statement, and the tumble was surprising given we never thought the RBA would be joining in the more hawkish chorus of global central banks (BoE, BoC, ECB) from the previous week.”

“Price action though suggests that we have seen the high in AUD for now, and that AUD will struggle to regain a 0.77 handle. Commodity prices are also providing less support, with the recent rally in iron ore stalling.”

“We see US dollar softer though, so wouldn’t expect too much more downside. Excepting a sharp risk-off move, perhaps inspired by N Korea, support should be around 0.7500/20.”