Sean Callow, analyst at Westpac, points out that last week was the Aussie’s best of 2019, +1.7%, backed by the improving tone on US-China trade and data that seemed to be good enough for the RBA to retain its broadly positive view on the Australian growth outlook.
“There have been plenty more headlines to support optimism over trade talks and pricing for an RBA rate cut in Oct has been trimmed to 25% and a move by Nov back to 80%.”
“Consumer and business confidence doesn’t augur well for Q3 or Q4 growth.”
“Indeed the rise in AU yields is arguably mostly a US phenomenon, with spreads moving slightly against AUD in recent days. In the week ahead, trade headlines should remain supportive and the RBA minutes might help also.”
“But the firmer DXY we expect post-FOMC and soft AU jobs data are likely to cap rallies. AUD probably needs a positive surprise to close above the 100dma at 0.6906. Neutral on the week.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.