22 Jul 2014
AUD/USD: June low of 0.9322 should hold - Westpac
FXStreet (Bali) - The Westpac FX Team shares their outlook on the AUD/USD, noting that the June low of 0.9322 should hold, with 0.9450/60 still capping rallies.
Key Quotes
"If core inflation prints at Westpac’s forecast of 0.7% q/q, 2.8% y/y, pricing for an RBA cash rate cut this year should soften, with little chance of an easing bias at the Aug RBA meeting. Gov Stevens too seems unlikely to stoke rate cut talk, remaining patient with the economy."
"China’s GDP and June IP data has caused some upward revision among forecasters of Chinese growth, a handy backdrop, while price action after the MH17 tragedy indicates resilient global risk appetite."
"However this should support AUD against vulnerable currencies such as NZD and EUR where yield support is waning, rather than produce a topside range break on AUD/USD. The June low of 0.9322 should hold, with 0.9450/60 still capping rallies."
Key Quotes
"If core inflation prints at Westpac’s forecast of 0.7% q/q, 2.8% y/y, pricing for an RBA cash rate cut this year should soften, with little chance of an easing bias at the Aug RBA meeting. Gov Stevens too seems unlikely to stoke rate cut talk, remaining patient with the economy."
"China’s GDP and June IP data has caused some upward revision among forecasters of Chinese growth, a handy backdrop, while price action after the MH17 tragedy indicates resilient global risk appetite."
"However this should support AUD against vulnerable currencies such as NZD and EUR where yield support is waning, rather than produce a topside range break on AUD/USD. The June low of 0.9322 should hold, with 0.9450/60 still capping rallies."