AUD/USD is well-supported on dips to the 0.65 zone but gains remain blocked above 0.68 – Scotiabank
The AUD has gained a little ground on the weaker USD through mid-year but it remains something of a laggard among the G10 currencies. Economists at Scotiabank analyze AUD/USD outlook.
AUD faces headwinds
Weak regional growth trends, amid slower-than-expected Chinese GDP, plus still-soft terms of trade represent headwinds for the AUD.
Sentiment and positioning remain negative amongst speculative and real money investors.
The RBA may have a little more tightening to do but the policy cycle looks nearly complete, with inflation showing signs of peaking.
Technical trends suggest AUD/USD is well-supported on dips to the 0.65 zone but gains remain blocked above 0.68.