AUD: Rallies to be capped in the low 0.73s - Westpac

Sean Callow, Research Analyst at Westpac, suggests that some tried to spin RBA governor Stevens’ appearance this week as dovish but a mere -2bp is priced for June which is plenty.

Key Quotes

“So long as GDP prints somewhere near our 2.7% y/y forecast, the RBA outlook should not produce any renewed weight on AUD.

Our expectation of a pause in the USD rebound in the week ahead suggests AUD/USD finds buyers on dips ahead of 0.7110/20. But the commodity angle is mixed at best. The oil price rebound promises higher LNG revenues in coming months but the reversal in iron ore prices may continue near term. Rallies to be capped in the low 0.73s.”