In view of Sean Callow, Research Analyst at Westpac, AUD looks to be driven by the more traditional factors of relative interest rates and commodities.
“Risk aversion has placed pressure on lingering AUD longs. But the global mood is a little calmer (the Korean won has steadied) and Australia’s Q1 CPI data (Wed) should see further trimming of rate cut pricing. Along with the prospect of iron ore prices stabilizing soon, the AUD/USD outlook may not be especially bullish, but it is probably at the lower end of its Q2 trading range.”
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