AUD/USD poised for a test of the low-0.71s – Westpac

Sean Callow, Strategist at Westpac, believes AUD could depreciate further towards the low-0.7100s in the upcoming days.

Key Quotes

“The upswing in US yields should continue to weigh on AUD/USD near term, as should the implications for the RBA of weak wages growth and patchy jobs data”. 

“But the very pointed reference in the May minutes to the rate cut being a close call leaves us comfortable with our view that June is not a serious chance for a follow-up, limiting the damage to AUD from relative yields”.

“Commodities meanwhile are broadly range-bound and still well up on the year”. 

“AUD actually held up quite well in the face of soft China April activity and lending data. So it’s not too bearish an outlook for AUD TWI but with USD probably firm enough for a mild downward bias for AUD/USD on the week, to the low 0.71s”.