Increased odds of a Trump win in November spell trouble for the China-sensitive Australian Dollar (AUD) in the long run. The Reserve Bank of Australia (RBA) is perhaps facing the worst inflation problem in the G10, notes Francesco Pesolestrategist of ING FX.
The AUD still has room to advance this summer
“The increased likelihood of a Trump win in November spells trouble for the China-sensitive AUD in the longer term. But the tactical picture depends much more on macroeconomic data from the US and national central banks.”
“The RBA is perhaps facing the worst inflation problem in the G10, with consistently high monthly CPI readings pushing it closer to another hike. July 31 will be the decisive day: Q2 CPI data will be released, and if it surprises to the upside, we think the RBA will hike rates in August.”
“Even if another hike can be avoided, the prospect of cuts is increasingly remote. Given our view that markets will reward currencies with hawkish central banks, the AUD still has room to advance this summer, before the US election gets too close to ignore.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
