AUD/USD could retest the 0.7680 area – Westpac

Sean Callow, Senior Currency Strategist at Westpac, believes the Aussie dollar could see a new visit of the 0.7680 area.

Key Quotes

“Last week we argued that AUD/USD would suffer only a "flesh wound" on the RBA rate cut we expected. As it turned out, the damage to AUD was so limited it was barely visible, with only a brief flicker under 0.75 on the easing that was about 75% priced. Part of the resilience can be attributed to the RBA statement, which was rather neutral in tone, casting doubt over market pricing of >50% for another cut before year-end”

“Commodities are also limiting AUD/USD downside. Spot iron ore has rallied above $60/tonne for the first time since early May, Westpac’s commodity export price index is +33% year to date. The rally should fade in time but for now it adds to the positive AUD mood. DXY's struggles post-US GDP should also linger, helping AUD/USD find support on dips towards 0.7500, with upside scope to the July high of 0.7676”.