Positive for AUD/USD in the week ahead - Westpac

Sean Callow, Research Analyst at Westpac, points out that the near-100k jump in Australian employment in 2 months sparked a half cent AUD/USD rally and at the very least should boost trading ranges in coming days.

Key Quotes

“The US dollar’s struggles and the potential for a bounce in iron ore prices – given the sustained rally in Chinese steel prices – are also positives for AUD/USD in the week ahead.”

“However, the AUD was (with CAD) the weakest G10 currency on Wed as risk aversion gripped global markets. If US yields are falling because of politically driven equity turbulence (the steepest daily rise in VIX since Brexit) then risk proxy AUD is unlikely to do much better than hold its ground against USD.”

“The quiet domestic calendar leaves AUD hostage to the global mood, which short term is likely to be cool, with occasional bouts of panic. This should see AUD/USD rallies run out of steam in the 0.7500/50 band, with support at 0.7330 likely to hold.”