While the RBA easing bias has been retained at its policy meeting yesterday it does seem that the hurdle for further rate cuts has increased somewhat in recent weeks with some signs of improvement in the domestic economy and ongoing rebalancing of the currency, notes BNP Paribas.
"The RBA has also toned down its rhetoric aimed at weakening the AUD - probably as it has fallen significantly vs the USD," BNPP adds.
"That said, given the risk from China and ongoing falls in commodities, AUD is likely to remain under pressure from here. Furthermore, a more formal acknowledgement in Friday's SMP of lower growth projections could see the AUD weaken," BNPP argues.
"In this context, we favour fading the bounce in AUD," BNPP advises.
A lot of ForexLive people are saying the same thing.
Oh, and as a ps. ... "Friday's SMP" refers to the Reserve Bank of Australia's Statement on Monetary Policy due on (you guessed it) Friday (Gold Star!)
The Statement on Monetary Policy sets out the Bank's assessment of current economic conditions, both domestic and international, along with the outlook for Australian inflation and output growth. A number of boxes on topics of special interest are also published. The Statement is issued four times a year.
I'll have a preview of it as we approach