From ANZ's latest FX piece, from Daniel Been, Head of FX Strategy (in brief and bolding mine)

  • On a tactical basis the risk reward for owning the AUD is starting to shift, and a move lower, at least on the crosses, is becoming increasingly likely.
  • Market pricing too much hope - in particular surrounding the US reflation story.
  • Our risk sentiment measure has hit levels which has rarely not led to a spike in risk aversion, and historically, this has at the very least stalled the rally in the AUD
  • In the very near term we expect that global growth will remain resilient, the signal that has been sent by global order to inventory ratios is likely to be as good as it gets ... the global tail-wind which has benefited the AUD for much of this year, will likely dissipate for now.
  • On the domestic front there is little that can offset this fading tailwind.


  • We think that there is some risk of near term weakness in the AUD, though we favour selling it on crosses, rather than against the USD
  • We recommend taking profit on our AUD long trade
  • and recommend selling AUD/CHF
  • Sell AUD/CHF at 0.7715, targeting 0.7445. We will reassess the trade at 0.78