BTMU FX Strategy Research argues that AUD/USD looks over-extended based on policy expectations given there has been no sign of any change in forward guidance and given the low level of inflation and the record low levels of hourly wage growth.
“So Deputy Governor Debelle’s comments will help to cap AUD/USD for now. Of course USD sentiment is fragile and broad FX sentiment still points to upside risks. But we would expect levels above 0.8000 to be met with more explicit opposition by RBA officials that will help curtail gains.
AUD/USD is 7% higher since the start of June and a correction lower is overdue,” BTMU adds.
Source: BTMU Research
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