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Forex Flash: AUD/USD run at 1.0400 possible after USD decline – Westpac

FXstreet.com (Barcelona) - The RBA decision and a busy data calendar should produce lively trade in AUD. According to Global FX Strategist Sean Callow at Westpac, “We still see the AUD/USD broadly range bound but AUD vulnerable on crosses.”

A very crowded data calendar is punctuated by the RBA meeting on Tue, where we look for no change but pricing of 50% chance of a cut ensures a lively day. Q1 PPI
(Friday) should be ignored ahead of Mar retail sales (Mon) when we also see the Apr TD inflation gauge. A super strong Feb was followed by a sharp fall in jobs in Mar so perhaps the uptrend in the unemployment rate is the best guide.

Indeed, “Just when USD weakness seemed sufficient for AUD/USD to break its ranges to the top side, 1.0400 failed to give way as gold and base metals tumbled once more. The dovish FOMC statement (flagging the chance of increasing QE, not just tapering off) fits the sluggish US economy and leaves open scope for renewed USD decline, meaning another run atv1.0400 is possible.” Callow adds.

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