Citi on the Australian dollar
Citi flags a scope for AUD to weaken in the near-term but remains structurally bullish on the currency through the end of the year.
"Looking deeper at the AUD developments, ABC News reported that China
has banned imports from some Australian abbatoirs - note though that
they have not been officially delisted or lost their licenses yet. This
comes just days after China flagged plans to introduce an 80% tariff on
Australian barley.
Market chatter of potential tariffs
imposed on Barley exports to China is a clear retaliatory barb given the
strong stance the Australian government has made to holding whoever is
responsible for this Covid outbreak accountable. Watch this
ramp up as we also look for supply chain redistribution away from China,
this is the embryonic stages of the end of Australia's reliance on
China for economic growth (alone)." Citi notes.
"CitiFX Technicals notes that Monday's close in AUD below 0.6493 suggests that 0.6373.6379 could be tested again," Citi adds.
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