AUD/USD: Buyers emerging on dips below 0.76 - Westpac

Sean Callow from Westpac, expects the AUD/USD  pair to rise above 0.7800 toward the end of the month with buyers emerging on dips below 0.76.

Key Quotes:

“Price action has been a little disappointing, with AUD falling against all but USD among the G10 over the past week. This suggests positioning is rather long, though at least on CME, leveraged funds hold only modest longs (24k contracts vs April highs of 61k).”

“Commodity prices continue to be supportive, with Westpac’s basket of Australian export prices holding around highs since Feb 2015, when AUD/USD was around 0.78.”

“The rebound in Australian job creation in July and accompanying dip in the unemployment rate to 5.7%, matching lows since 2013, reinforce the very low risk of RBA easing before Nov.”

“With USD on the back foot against a swathe of Asian currencies, the risks seem to lie to a resumption of AUD/USD gains. We look for 0.78+ into month-end, with buyers emerging on dips below 0.76.”