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- AUD/USD eyes a dip to the 50-DMA at 0.7365 – Westpac
AUD/USD eyes a dip to the 50-DMA at 0.7365 – Westpac
The Reserve Bank of Australia (RBA) gave up on YCT but pushed back hard on 2022 hike talk. Given solid USD, the aussie risks a dip to high 0.73s near-term but that would be attractive on the multi-month/quarter outlook, in the view of economists at Westpac.
Commodity support is waning
“While dropping the April 2024 yield target, Lowe flatly declared that ‘the latest data and forecasts do not warrant an increase in the cash rate in 2022.’ This has cooled the more extreme bets on RBA hikes, undermining AUD yield support. This probably still has a way to run, though any further signs of economic rebound in the week’s key data will limit the fall in yields.”
“Commodity support is waning and will continue to do so in the official data. Of course trade surpluses continue, so Australia’s external position still provides insulation for the aussie.”
“With the USD likely on a sound footing, we see modest downside risks on the week, eyeing support at the 50-DMA 0.7365 and 100-DMA 0.7382. But trade in this area should appeal on a multi-month basis with Australia’s vaccination rate tracking encouragingly.”
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