untitled design

AUD/USD: The rally could extend this summer – ING

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

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular