The aussie has fallen for five days in a row to just above 70 cents, its lowest levels since late July. USD momentum and related equity slide should keep the pressure on the AUD/USD pair, along with the RBA’s dovish tone. The 0.6965 mark is the next major support, economists at Westpac report.
“We can’t ignore the role of the US dollar, with the Bloomberg Dollar Index around two-month highs. With US$ up again all G10 FX over the week, it is not unusual to see AUD underperform, especially as global equities tumble.”
“There are A$-specific sources of pressure. RBA’s Debelle was quite downbeat and reiterated options for further easing, causing forecasters including Westpac to pencil in a cut to 0.1% in Oct or Nov.”
“Benchmark iron ore has dropped $15 from the 14 Sep high and gold has tumbled but coking coal and copper are holding up. Australia will continue printing trade surpluses but the USD and risk mood are key for the aussie near-term.”
“It is hard to draw a line under AUD/USD in the current market mood, so we switch to down on the week, with scope for 0.6965 then the 0.6900 area, though there is no obvious support around there.”