AUD/USD: Low key local calendar in coming days should lend support - Westpac

Sean Callow, Research Analyst at Westpac, suggests that the RBA’s steady hand this week was no surprise but the lack of an overt easing bias was.

Key Quotes

“Of course the statement does not preclude action as soon as our August base case but for now, optimism prevails, even with a repeat of the caveat about any potential AUD appreciation. AUD/USD was already looking more constructive given improved risk sentiment, a weaker USD in the wake of the May payrolls report which wiped out pricing for a June Fed hike, oil prices pushing above $50/bbl and iron ore showing signs of stabilising around $50/tonne.

A low key local calendar in coming days should also lend support to AUD/USD, with scope to probe resistance at 0.7550 (late April lows). Still, the 0.75 handle should meet decent selling given that multi-month downside risks are still intact, with the Fed hike/RBA cut combination still our base case for Q3.”