AUD: Hard to sustain trade above 0.80 - Westpac
|AUD/USD’s steady downtrend in the first half of August was consistent with lopsided speculative long positioning and a reversion towards fair value, at least on Westpac’s estimates, explains Sean Callow, Research Analyst at Westpac.
Key Quotes
“The broad USD gains in that time were interrupted on Wednesday, with renewed doubts over the chances of another Fed rate hike this year and yet more political turmoil. As a high beta USD play, AUD outperformed, recapturing the 0.79 handle.”
“Also helping AUD in recent sessions has been an easing in volatility measures, with North Korean tensions waning as the North backed off the threat to Guam.”
“Spot iron ore prices slipped to 2 week lows but futures bounced midweek, as did base metals. Strong jobs data added to the fuel for the AUD/USD rebound which could extend to around 0.80 if USD struggles again.”
“Yet hefty long AUD positions already imply an upbeat outlook, so it may be just as hard to sustain trade above 0.80 as it was three weeks ago.”
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