AUD/USD: Momentum starting to build towards 0.68 level - Westpac

Analysts at Westpac suggest that in the last week or so that momentum has started to build towards their 0.68 year-end target for the AUD/USD pair.

Key Quotes

“The sharp deterioration in trade relations between the US and China in the second week of May that saw Trump raise tariffs on $200bn of imports from China from 10 to 25% and order his trade representative, Robert Lighthizer, to start work on raising tariffs on all remaining imports was one factor pushing the A$ below 0.70.”

“However, the other was RBA guidance on the Australian economy. A week ago, the RBA cuts its forecasts for growth and inflation to barely acceptable levels despite making the technical assumption of two rate cuts in its forecasts.”

“Clearly then, it would not have been pleased to see the unemployment rate in Australia pop up to 5.2%, though there may have been some comfort in another month of robust job creation, with a headline 28k boosting annual jobs growth to 2.6%, and  full-time jobs up 2.9%yr.”

“On Tuesday we see the minutes from the May RBA policy meeting but the key for AUD should be 45 minutes later when RBA Governor Lowe speaks on the “Economic Outlook and Monetary Policy.” Traders will be watching this speech for any guidance on how quickly rates will be cut, with money markets fully pricing a move by July and 80% for June.”

“The Australian dollar has fallen 2.2% so far this month and is the worst performing G10 currency over that period. However, it’s not been all bad news for the A$ outlook.”

“The ratcheting up of tariffs on Chinese goods, the retaliatory tariff increases by China and this action on the Huawei have materially hardened the dialogue between the two superpowers. Consequently risk and growth sentiment are likely to be suppressed in the near term. This is a weight on AUD/USD though whether the pair tests the 0.6800 area probably depends more on what Governor Lowe has to say.”


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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD remains depressed but off daily lows

The EUR/USD pair is recovering from a daily low of 1.1216, although holding in negative territory for the day. US preliminary Michigan Consumer Sentiment Index improved by less-than-anticipated in July, coming in at 98.4 vs. the 98.5 expected.


GBP/USD trading marginally lower daily basis but above 1.2500

The Pound gave back some of its Thursday’s gain on dollar’s relief. The GBP/USD pair broke a daily descendant trend line coming from June’s high and holds above it, leaving little room for sellers to act.


USD/JPY: bears pausing, still in control

Japanese National Inflation steady at 0.7%YoY in June. US Michigan Consumer Sentiment Index expected at 98.5 in July. USD/JPY corrective advance falling short of signaling an interim bottom in place.


Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News

Something has spooked the Fed

We wish we knew what it is. Wild talk of the US joining Japan and Europe with zero or negative return on the 10-year is or should be very frightening.

Read more