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Flash: Australia strategy profile – Westpac

FXstreet.com (Barcelona) - According to Global FX Strategist Sean Callow at Westpac, “A major recovery is very unlikely ahead of US payrolls but we look for at least interim stability on the oversold Aussie, with the RBA set to be on hold and GDP growth to be reasonable.”

“We ultimately look for 0.9530 to hold, with upside capped mid-0.9700s. On a one-month view we see the Fed remaining dovish, helping the AUD/USD back to 0.9800.” Callow adds. Moving the AU outright, unless the RBA delivers a surprise rate cut Tuesday it’s difficult to see a domestic driver of bullish outcomes this week.

In the medium-term, we remain better buyers on dips and target entry level for 3yr yields at 2.75%. Finally, “while we do not expect RBA actions to support a bull steepener, our analysis suggests that while the AUD/USD remains weak, and US 10yr yields are pressured, then bear steepening will remain the most likely AU curve outcome.” Callow warns.

NZD/USD jumps above 0.8050

The New Zealand Dollar is trading higher against the Greenback following the weaker than expected ISM manufacturing index. After rising around 100 pips from 0.7970, the NZD/USD has broken above the 0.8000 to reach the intra-day highs around 0.8090.
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Forex: USD/JPY hits 4-week low below 99.00

Dollar massive selloff into US session is seeing USD/JPY trading at its lowest level in 4-weeks, having been as low as 98.85 at the time being. Once below key 100.00 level, the bearish momentum left the pair vulnerable...
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