Dovish RBA and rising Canberra-Beijing tensions to restrain AUD's performance – Rabobank

"Compared to its peers, the RBA is very candid in its acknowledgement that QE plays a pivotal role in lowering the value of the exchange rate," note Rabobank analysts.

Key quotes

"In a speech about monetary policy this week, RBA Deputy Governor Debelle referred to the exchange rate on numerous occasions and stated that the aim of the Bank’s bond purchase programme “is to put downward pressure on bond yields and the exchange rate to provide stimulus to the Australia economy”."

"Much to the consternation of AUD bulls, despite record highs in various commodity prices, the value of AUD/USD has remained consolidative in recent weeks, only spiking higher after the shockingly weak April US payrolls data undermined the greenback."

"Although we see potential for AUD/USD to drift higher to 0.79 on a 6 to 12 month view, the strength of the dovish forward guidance of the RBA coupled with rising tensions between Canberra and Beijing is likely to continue to restrain the performance of the AUD."