From CBA's morning note, this on the AUD/USD (bolding mine)
AUD is underperforming most major currencies. AUD/USD is trading lower near 0.7813 on broad-based USD strength.
Australia's unimpressive wages growth backdrop continues to weigh on AUD.
- The improvement in Q4 wages growth was driven by the public sector rather than the private sector.
More negative Australia-US two year swap rate differentials (-0.47%. the most since August 2000) is also undermining AUDUSD. In our view, this remains a headwind for AUD/USD rather a factor than would lead to sustained AUDUSD weakness. Two reasons underpin this view.
- First, Australia's current account deficit is small at just 2% of GDP.
- Second. Australia's terms of trade will remain high as the synchronised global economic expansion support commodity prices.
Technically, AUDUSD has important support at the 200-day moving average (0.7775).