A$US$ pushes higher as forecast

June 7, 2018

Currency Brief 

 

Good morning all;

 

AUDUSD: The past week has seen my forecast move higher for the local currency come to fruition as political tensions ease, US tariffs are confirmed and on the back of better than expected Australian data. Aussie Retail Sales, GDP and Trade Balance numbers have all improved since last month, thus outweighing the predictably bearish Reserve Bank statement. Holding interest rates at 1.50% for the 20th straight month, a record for them, some economists now forecasting that the central bank may actually be forced to cut interest rates further. I'm not so sure that will happen, although do see this record low being in place for another year at least. The market is now looks to the G7 meeting this weekend, the expected hike in US Interest rates next Thursday morning as well as any Trump rhetoric ahead of the NKorean meet. On the charts and the A$US$ exchange rate has hit trend line resistance and fallen away from the 0.7670 target highs, however does remain firmly in the upward channel that has been in play for the last month. Technical support is a way down at 0.75c, so a break of either side will determine much longer dated price action; nonetheless my belief is we'll still see a break to the top side as long as the global economic situation remains as is. In the short term, buyers and sellers have their ideal targets. 

 

Jim Devonport

E: jim.devonport@finport.com

M: 0415 066 468 


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