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Via WBC:
- The Aussie has been one of the worst performers in the broad-based US dollar rally since the June FOMC and ECB meetings. It is now below our weekly fair value estimate for the first time this year.
- If US-China trade tensions remain the market focus in coming weeks, risks are to 0.72/0.73.
- But Australia’s key commodity prices have been broadly resilient, especially LNG and thermal coal, suggesting AUD downside should be contained multi-month.
- The RBA should also be optimistic on Australia’s growth outlook in its August statement.
- We look for 0.75 end-September
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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