FXStreet (Edinburgh) – Strategist at Westpac Sean Callow sees bullish attempts in the pair as temporary.
Key Quotes
“The RBA was unfazed by the August market volatility in the statement after its 1 Sep meeting and is likely to remain so on Tuesday. Pricing for another rate cut by year-end is 50%”.
“Commodity prices have had a somewhat softer tone over the week but remain well above July lows, leaving short term fair value estimates well above spot”.
“Speculative positioning is firmly short, providing occasional AUD support from reduction of these positions (the nice bounce in response to the China PMIs today being a case in point)”.
“Yet China’s holidays won’t dissipate concerns over its growth pulse, limiting the upside on AUD/USD. On the week, 0.69-0.72 should capture the bulk of trade, with risks still lower multi-week/month as iron ore prices falter in response to ramped up supply”.
(Market News Provided by FXstreet)