AUD should remain weighed by the strong USD - Westpac

Sandeep Kanihama FXStreet Contributor

AUD/USD was brutally rejected on its probe of the 200dma (0.7817 vs high of 0.7813), but the key driver is of course the US dollar revival, according to Sean Callow, Research Analyst at Westpac.

Key Quotes

“The breadth of the dollar’s gains, backing from higher yields and squeeze on positions suggests it continues at least in the week ahead and probably over the next month or so.”

“Domestically, the Q1 CPI didn’t really move the dial, headline inflation a touch softer than expected but core CPI edging up to 2.0%yr. The RBA will surely be firmly on hold on Tue, with most attention on whether Lowe will confirm a lower 2018 GDP forecast to be revealed in the SoMP (3.25% down to 3.0%).”

“With commodities not giving a clear lead, AUD/USD should remain weighed by the strong US$, probing and perhaps breaking Dec’s lows around 0.7500, before becoming a little more two-way as positioning adjusts (latest data indicates flat AUD).”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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