Morgan Stanley on the Australian dollar.

  • "We continue to see compelling reasons to be short AUD/USD (targeting 0.70 with a 0.78 stop). Markets are pricing in excessive RBA hawkishness, with liftoff now fully priced for July 2022, compared to RBA guidance for 2024"
  • "Higher US real yields and tighter breakevens suggest a weaker AUD. COVID-19 risks remain asymmetrically negative in Australia, particularly with the more-transmissible Delta variant. Rising concerns about global growth (as evident in the distribution of equity returns) should be AUD/USD-negative"

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