AUD/USD should remain on a decent footing near term - Westpac

Sean Callow, Research Analyst at Westpac, explains that AUD/USD is up about 1% over the past week and should remain on a decent footing near term.

Key Quotes

“The US dollar seems unlikely to find much fuel from yield spreads for now, with June hike pricing already above 80% and divisions among the Republicans apparent over the White House budget proposal.”

“AUD’s commodity support should improve near term. Chinese authorities have been eager to counter the negative headlines over Moody’s downgrade of China and the strength of steel reinforcing bar (rebar) prices suggests iron ore could play catch-up soon.”

“On the home front, capex will help shape Q1 GDP forecasts (7 Jun), where we expect decent growth. More balanced spec positioning and perhaps most importantly, improved global risk sentiment argue for AUD/USD to probe the 100dma at 0.7557. But the 0.7550/ 0.7600 area could see bears re-load.”