AUD/USD ranges to ease slightly to high 0.70s to low 0.72s – Westpac

AUD/SUD has hit Hit a five-week high despite equity rout and supposed flight to safety. Economists at Westpac see modest downside risk near-term but bargain-hunters should not expect 0.7000 to break.

Soaring commodity prices and miner dividend conversion help

“Public information on dividend conversion by Australian miners points to purchase of about A$13bn over Q1, mostly this week (A$10bn).”

“We can note the ongoing surge in energy prices, supporting Australia’s LNG exports. Related to this commodity price support is the fact that Australia is running large current account surpluses, in contrast to e.g. the GFC.”

“The RBA outlook has been overshadowed somewhat but yields did fall on the muted rise in Q4 wages. A cautious tone is likely on Tuesday.”

“AUD/USD ranges should ease slightly to say high 0.7000s to low 0.7200s.”