In brief comments via Westpac with an updated AUD/USD view over the coming one to three months:
- The Aussie’s traditional sensitivity to risk appetite has largely been relegated to intra-day movements since Russia’s invasion of Ukraine. A$ remains the strongest currency in the G10 since the invasion, followed by fellow commodity-linked currencies. Clearly the extraordinary surge in energy and metals prices strengthens Australia’s already large trade surpluses.
- Still, the RBA’s slow shuffle towards finally commencing tightening contrasts with an FOMC openly considering 50bp hikes.
- Moreover, CFTC positioning data shows many A$ shorts have now been unwound. This should help cap AUD/USD in the 0.7650/0.7700 area near term, though we expect dips to be modest multi-month.
AUD daily, what say the tech analysts on that penultimate bar, or any of the others?