AUDUSD to remain range bound between 0.90-0.95 for now - J.P. Morgan

FXStreet (Łódź) - According to Sara Yates, Global Head of FX Strategy at J.P. Morgan Private Bank, the downward drag on AUD/USD has lessened recently.

Key quotes

"From the AUD’s side, the economic news has been better than expected at home and abroad, causing the market to dismiss thoughts about further rate cuts and taking some of the weight off the currency."

"At the same time, the inability of US 10y treasuries to sustainably de-anchor from 2.5% has seen the USD’s strength delayed."

"As such, we continue to believe that 0.90 will be the range low in AUDUSD for now."

"Australia’s economy is still transitioning away from one that supported such an overvalued currency and US yields will eventually go up."

"For now, we expect the knowledge of these long term trends to continue to cap the upside for AUDUSD around 0.95."

"In our opinion, the jawboning from the RBA’s governor last week will further undermine investors’ conviction in holding AUDUSD longs."

"We believe these factors will continue to keep AUDUSD range bound between 0.90-0.95 for now. "