Australia’s Q3 balance of payments data showed a modest deterioration in the balance of payments picture, with a further widening in the current account deficit. Broader capital flow dynamics remain supportive, however, with ongoing FDI inflows and a pick-up in flows into Australian government debt. Shorter-term flows then continue to largely drive bouts of AUD weakness, leaving AUD vulnerable to sharp corrections higher. It is worth noting then that a lot of the flow in AUD/USD on our platform last week has happened near the recent lows.
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Deutsche Bank