AUD/USD to drop towards the 0.76 mark on strong NFP report – Rabobank

In the near-term, the RBA’s QE policy, the Victoria lockdown and issues related to trade with China are still good reasons to expect AUD/USD to remain capped, according to Jane Foley, Senior FX Strategist at Rabobank. In addition, the aussie could dip towards 0.76 on a strong NFP report.

USD could rise further, the ripples of NFP have the potential to stretch far and wide

“At the policy meeting in July, the Reserve Bank of Australia will be weighing up the improvement in the domestic economic data against factors such as the latest Victoria lockdown, the potential for further outbreaks of covid, trade tensions with China and the risks to the exchange rate from being labelled a hawkish central bank.” 

“As long as the RBA is concerned about low inflation, it is unlikely to welcome a stronger AUD. This is a good reason to anticipate that the RBA will be keen to continue being perceived as a dovish central bank.”

“Any additional broad based USD strength following the May Nonfarm payrolls report could push AUD/USD towards technical support in the 0.7600 area.”