AUD/USD: Opportunity to sell – Westpac
The current situation of the Aussie dollar after Lowe’s speech is seen by strategists at Westpac Institutional Bank as an opportunity to sell, given signals of falling commodity demand.
“The key point from Lowe’s speech on Wednesday was the RBA currently expects the impact to be temporary, if significant, and that growth will recover into end year on stimulus efforts.”
“Our views are much more cautious with revised growth forecast of just 1.9% (versus RBA at 2.75%) for the year ended 2020 versus 2.1% previously.”
“The A$ should remain sensitive to the coming signs of falling commodity demand that we will inevitably see.”
“We took profit on our short AUD from 0.6950 on the dip through 0.6700 last week. While the A$ could push higher near term given guidance from Lowe that they are taking the ‘long view’ on the impact of bushfires and coronavirus, we doubt that we will see much strength above 0.68.”