A note via CBA from Monday contains a buy reco for the Australian dollar
Nominates 0.7750 as an entry with
- stop-loss 0.7560
- profit target 0.8200
Says the background remains positive for AUD:
- there is an increased probability that major central banks will increase their rate of bond purchases to contain a rising yields, which will further support reflation themes ... and therefore AUD/USD
- AU-US 10‑year government bond yield differentials are near multi‑month highs
- AUD/USD sill is undervalued based on relative terms of trade and iron ore prices
- RBA jawboning will be limited to saying its policy has helped prevent currency moving higher than it would have done otherwise, and not overtly taking the AUD down
