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AUD/USD expected to remain capped at 0.7800 – Westpac
FXStreet (Barcelona) - Sean Callow of Westpac, gives the outlook for AUD/USD for the week ahead, expecting the pair to remain capped at 0.7800, especially if markets favour a May RBA rate cut deal.
Key Quotes
“AUD/USD seems comfortably range-bound near term. A steep bounce in iron ore prices has not had a tangible positive impact, probably given the outlook is flat as best, with Chinese growth decelerating and supply still rising. More helpful is the reassessment of May RBA easing risks, pushing up AU short end yields.”
“If AUD/USD tests under 0.7600 on the week (not certain), it should find willing buyers. But the 0.78 handle is proving problematic and will remain so if investors move back towards Westpac’s view that a May rate cut remains likely. This would also cap this week’s AUD/ NZD rally with a 1.02 handle.”