AUD: Domestic story remains broadly supportive - Westpac

Sean Callow, Research Analyst at Westpac, suggests that AUD’s domestic story remains broadly supportive.

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“So too the resilience of commodity prices. How much of this is stoked by fear of further USD/Asia gains is anyone’s guess. But at the very least, it is skewing AUD/USD fair value estimates to around 0.77-0.78.”

“This provides useful insulation for AUD/USD after a 4 cent slide since the US election. But until US yields pull back substantially and hold lower levels for a few days, the strains evident across EM including Asia should cap AUD rallies. The 200dma at 0.7520 seems less likely to be tested than 0.7200/25.”