This via Westpac, their 'FX Weekly'
(in brief)
- Elevated commodity prices and decent Australian data should help AUD/USD find support on dips to around 0.78
- But if risk aversion rises again and the US dollar finds some support from upbeat Fed commentary in Wyoming, then AUD/USD gains should be capped around 0.80
More:
AUD/USD's steady downtrend in the first half of August
- consistent with lopsided speculative long positioning
- and a reversion towards fair value (an estimate of where the Aussie "should" be based on fundamentals such a commodity prices and interest rate differentials)
- A firmer US dollar played a role in this move
Broad USD gains in that time were interrupted last Wednesday ... looked to be driven by
- a combination of Fed commentary
- and US political turmoil
AUD also found some help last week on
- An easing in volatility measures, with North Korean tensions waning
- Spot iron ore prices recovered ... almost $78/tonne, a high since April
- Australia's strong jobs data added to the fuel for the AUD/USD rebound
