GS are not gung-ho on the AUD in their latest forex client note, but do favour it:

AUD/USD has had a round trip since the G20 meeting last weekend, initially rallying on the US-China 'truce' before falling on weaker GDP data and perceived dovishness from the RBA Deputy Governor Debelle.

  • In our view, Deputy Governor Debelle's comment that although the next move is likely a hike "there is still scope for further reductions in the policy rate" should be taken in the context of a speech dedicated to the policy response to the 2008 financial crisis rather than a signal on future policy direction.

Further, at least some of the weakness in the GDP accounts should prove temporary and growth for 2019 should remain above trend.

With a partial cut now priced into the curve, we think the risk-reward is favorable for AUD higher on a stabilization of both China data and CNY

GS forecast for the AUD 3 months out is 0.75