RBA statement provides support to the AUD, but Asia growth outlook remains key
The RBA’s statement this morning provided a moderate boost to the AUD with the Board adopting a more neutral stance,
indicating that their interest rate cutting cycle has likely come to an end. Over the weeks ahead AUDUSD will be driven by the data flow from China (most major releases for August will be published next week) and expectations for Fed tapering in September. Our BNP Paribas FX Positioning Analysis indicates that short AUDUSD is one of the largest FX positions currently held by investors (in addition to long USDCAD). Following the RBA, we therefore view that the AUD is vulnerable to a move higher if the economic news flow continues to indicate a recovery of global growth momentum. Our technical analysts highlight that the first major resistance for AUDUSD is at 0.9212/32, the highs from 12/19 of August.
Read the full report: FX Daily
BNP Paribas