I posted yesterday on the RBC's view on the Australian dollar for the week: Long AUD/USD is a "G10 Thematic Trade of the Week"
Their comments on what to watch today for the AUD (I posted their CPI comments earlier, here: Australia inflation data due today - preview) ... bolding is mine:
Our economists look for the CPI to have increased 0.5%q/q, 2.3%y/y in Q2 (slightly above consensus).
- Food prices were higher in the quarter following inclement weather on the east coast, which will more than offset a small fall in fuel prices. Stripping out the noise, we expect the average of the underlying rates will slow a tick to 1.7%, consistent with limited growth in unit labour costs and muted inflationary pressures in service sectors.
RBA Governor Lowe speaks on the labour market and monetary policy overnight tonight.
- Following Deputy Governor Debelle's speech last week, the forward curve is almost entirely flat, so Lowe would need to be very dovish to do material damage to AUD.
We went long AUD/USD as our trade of the week this week and we see the dip on Friday as a buying opportunity as markets are likely to return to focusing on the outright yield on AUD, rather than rate dynamics.
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While you're here ... updates (not a lot of movement so far):
