AUD: Multiple Pressures
• Emerging market volatility should weigh on the AUD, but this is not the Asia Crisis II.
• Australian Capex should highlight the reasons why the RBA is easing, in contrast to the US.
• While speculative positioning is record short AUD, there are other sources of AUD selling.
The AUD/USD remains within its 0.92 to 0.89 range, but has come under pressure by the present instability in emerging markets (EM). This has placed the AUD at the bottom half of the range in the last week. We risk a break to the downside if the broad-based EM sell-off continues.
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