AUD to stabilize near 0.76 levels - Westpac
Rather unexpectedly, the sharpest move in AUD/USD this week was in response to the sub-consensus wages data, according to Sean Callow, Research Analyst at Westpac.
“AU yields slipped in response but activity data remains encouraging for an RBA that has made clear it is patient on the expected pickup in inflation.”
“Oct business conditions jumped to a record high and while Oct jobs growth slowed, the fall in the unemployment rate continued to a 4+ year low. Markets still place a near-80% chance on an RBA hike at some point in 2018. That shouldn’t change much near term, limiting downside on AUD.”
“In terms of global factors, Australia’s key commodity prices are well within the past 2 months’ range but risk appetite is becoming more interesting, showing some cracks after a very placid period. Further equity nerves could see AUD/USD test 0.7515/20 support but stabilization should leave it nearer 0.76.”