Strategist at Westpac Sean Callow believes the Aussie dollar could extend its upside momentum to the 0.77/0.78 band.
Key Quotes
“Specs have helped drive AUD gains but it’s not obvious why they would stop here. CFTC data shows the combined AUD net long of leveraged funds and asset managers at 51k last week, the most bullish stance since April 2013, when AUD/USD was at 1.0450 and Fed QE was running at full pace. But positioning is not yet extreme and Yellen’s speech has emboldened USD bears”.
“Iron ore and energy prices are not supportive of fresh AUD gains but given the USD mood and evidence of substantial Japanese demand for foreign bonds, AUD/USD once again looks set to spend some time in the 0.77-0.78 region that prevailed last June”.
“Data will be of interest but not pivotal. Should the RBA surprise by dropping its neutral language on the currency, the likely fall in AUD should be modest and probably not sustained, given the global forces supporting the Aussie”.
(Market News Provided by FXstreet)