AUD / USD remains in neutral ground so far this week, with most G10 currencies lower against the USD, Westpac economists note. They see that staying above 0.7800 is still hard work, but the renewed rise in commodity prices is a factor that favors buying in the face of setbacks below 0.7700.
Key statements:
“Renewed strength in iron ore and copper prices is producing fair value estimates in the low 0.80s and helping to sustain Australia’s trade surpluses, despite good news in import demand.”
“The domestic story remains generally positive. We expect the government to announce about $ 40 billion in new spending to support growth for two years even as the budget deficit drops to -3.3% of GDP by 2023. Strong growth momentum should make markets keep talking about reduced stimulus from the RBA (Reserve Bank of Australia) at the key meeting in July. “
“We have been searching buy the dips in the AUD / USD for some time and now we are long from 0.7680, seeing a margin to 0.80 in several weeks“.
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