A snippet from Citi overnight on the Australian dollar, in a nutshell they see the S&P/AUD relationship holding.
Citi summarise RBA Gov Lowe comments yesterday (this should be familiar if you were following along here as Lowe spoke):
- RBA to keep rates low for a few years
- Rates won't be raised until CPI and unemployment reach the RBA's targets
- He highlighted the need to sustain fiscal stimulus (like all central bankers right now)
Citi conclude:
- broadly in line with our structural bullish bias on AUD into H2
- In the short term, AUD could keep tracking S&P higher
- Equities rally can continue short-term, and drag AUDUSD with it.