Forex Flash: AUD strategy profile – Westpac

FXstreet.com (Barcelona) - Base metals prices continue to test lows since November, along with continued pressure on iron ore and coal, which have all affected the AUD/USD. However, according to Global FX Strategist Sean Callow at Westpac, “ This seems more a reason to sell into AUD and NZD bounces than to be too bearish vs. the USD where ranges are creeping higher. If European turmoil can be limited, 1.0350-1.0500 should contain trade in a short week.”

Regarding the AU outright, the Cyprus news has pushed domestic yields towards the upper end of their range. Barring any surprises from the RBA Governor in tomorrow’s speech, we expect AU bonds will simply trade in line with global sentiment though are not expecting a breach the recent high in yields (3.17% in 3yr bonds).