AUD: The worst performing G10 currency on a 1-day view – Rabobank
The Australian Dollar (AUD) has reverted to type, becoming the worst performing G10 currency on a 1-day view in broad risk off market sentiment, Rabobank’s FX analyst Jane Foley notes.
Chinese growth concerns weigh on AUD
“The AUD’s poor performance is despite risk that the RBA could hike interest rates at its August 6 policy meeting but reflects the potential headwinds implied by continued weakness in the Chinese economy in addition to the Aussie’s historical status as the ‘high risk’ currency of the G10 group. We view dips in the AUD/NZD as buying opportunities.”
“AUD/USD has been firmly caught up in the risk off mood that is dominating sentiment. In the first part of this month AUD/USD was rallying as the USD weakened in response to heightened expectations of a September Fed rate cut. More recently the AUD has been weighed down by a wave of fears stemming from Chinese growth concerns.”
“Currently Australia runs a small current account surplus. It also has a strong budget compared with its G10 peers and a relatively strong record on GDP growth within the pack. We see the strength of these fundamentals as limiting follow through selling on the AUD and look for the Aussie to find its feet vs. the USD into the RBA’s August 6 policy meeting. We continue to target AUD/NZD1.12 in the coming weeks.”
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FXStreet Insights Team
FXStreet
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