Macro
Sean Callow

This week the Aussie weakened a little against most major currencies but has held up against the US dollar. This is a decent performance given that it had to absorb the RBA’s first rate cut since 2016 and Australia’s very poor GDP data. On Tuesday the RBA cut its cash... Show More

Macro
Sean Callow

Considering the blows the Aussie dollar has suffered this week, it has been quite resilient, roughly unchanged over the week against the US dollar, around 69 cents. The Aussie did start the week on a positive note, jumping on Monday’s open as the Coalition government defied opinion polls to retain... Show More

Macro
Sean Callow

It was a successful week for Westpac’s economics teams in Sydney and Auckland as they correctly predicted both the RBA’s steady hand and the RBNZ’s interest rate cut despite sharply divided market pricing and economists’ forecasts. But the fragility of the Australian dollar’s rise against the kiwi after the RBNZ... Show More

Macro
Sean Callow

The Aussie dollar has fallen more than a cent this week, with the sharpest move coming in response to Australia’s Q1 inflation data on Wednesday. The below-consensus inflation reading stoked a fresh wave of pricing for RBA rate cuts. A cash rate cut to 1.25% had only been fully priced... Show More

Macro
Sean Callow

The US dollar was stronger against almost all major currencies this week. This was not so much due to positive news on the US economy but instead in response to negative developments elsewhere. The euro for instance tumbled on Germany’s very weak manufacturing survey for March. Show More

Sean Callow

The US dollar is lower against most G10 currencies this week, with the British pound’s 2% rally particularly notable. The pound jumped as the UK parliament voted in favour of an amendment that rejects a ‘no-deal’ Brexit under any circumstances. Show More

Sean Callow

Months in advance, we could see that this would be a pivotal week for the Australian dollar and interest rates, as was early February. A month ago, the focus was on the RBA’s lower growth forecasts and its shift in underlying policy bias from an eventual hike to risks on... Show More

Macro
Sean Callow

The Aussie dollar is about flat over the week, around 71 US cents, but it has been very volatile. Australia’s key data releases on wages and employment were quite encouraging, but the Aussie was then hit by Westpac’s new forecast for the RBA cash rate and worries over China’s coal... Show More

Malcolm, our Economics team does the longer term forecasts. In his monthly commentary on A$, Bill Evans wrote, ""We confirm our target for AUD to head to USD 0.70 through 2019."" His writeup is on p4 here: https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2018/August/WestpacMarketOutlookAugust2018.pdf

On A tipping point for the Aussie dollar? -

Peter, Westpac's year-end AUD forecast in the Feb 2018 monthly report was 0.72. End-Sep forecast was 0.74. And yes, they are sometimes revised! Commodity prices are indeed under pressure this week though our daily index is still in about the middle of the range of the past 5 years. I agree we need to watch the yuan but the PBoC has $3 trillion of FX reserves to ensure it doesn't fall too fast.

On A tipping point for the Aussie dollar? -

Good pickup, Jay, the labels aren't visible - the red line is 60 day correlation, the grey line is 30 day. I am using MSCI World Index in US$ terms so there's plenty of scope for the daily % changes in the 2 series to diverge but lately the relationship has tightened, even though AUD/USD had been range-bound until last week.

On A tipping point for the Aussie dollar? -