AUD/USD to move back lower towards 0.7245 support – Westpac

Aussie’s price action became more two-way this week, after five straight weekly gains. Economists at Westpac look for USD to find renewed support, leaving AUD/USD rallies stalling around 0.7400 and downside risks to 0.7245 support.

Commodities still supportive but RBA’s caution on rates should be starkly contrasted with the FOMC

“LNG is Australia’s #3 export, with #2 coal also soaring and #1 iron ore back above $160/t. This ramp-up in Australia’s resources export prices looks set to be sustained for some time, even though the most extreme prices should unwind partially.”

“The RBA’s view of Australian economic resilience should be reinforced by the labour force data. But the RBA’s caution on rates should be starkly contrasted with the FOMC next week.”

“We look for USD to find renewed support, leaving AUD/USD rallies stalling around 0.7400 and downside risks to 0.7245 support.”