AUD likely to test key support levels around 0.7760/75 - Westpac
|With the RBA indicating that monetary policy is firmly on hold, interest rate differentials continue to grind away from AUD and towards USD, notes Sean Callow, Research Analyst at Westpac.
Key Quotes
“Commodity prices are more helpful for the Aussie, with benchmark iron ore prices pushing above $78/tonne in the wake of lunar new year holidays, highs since March 2017. There may be some support from reported plans by Chinese authorities to cut steel production in the areas surrounding Beijing.”
“If iron ore remains well supported, it will reinforce the recovery in AUD/NZD, which last week fell to 6 month lows in the mid-1.06s but has since recovered to the mid-1.07s. AUD/USD though seems likely to test key chart support levels around 0.7760/75 if the US dollar avoids negative surprises from Chairman Powell and the inflation data.”
“Australia’s data highlight is Thursday’s survey of both Q4 actual business investment and capital expenditure plans for the rest of 2017/18 and also 2018/19. The survey will help form forecasts for the Q4 GDP report due on 7 March.”
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