Nomura Research discusses AUD outlook and maintains a long exposure against an equally weighted basket of EUR and GBP.
"Our short EUR (50%) and short GBP (50%) versus long AUD position performed moderately well. We retain conviction at 3/5 and look for an approximate 4move, by end-October, and from our entry levels on 18 August," Nomura notes.
"Our position remains exposed to risk from a major swing in global sentiment, but we believe that likely respective (near-term) macro performance and respective terms of trade shifts (favouring Australia over Europe) offer significant underlying fundamental support. There is little local near-term news of significance, ahead of the RBA meeting on 6 September, at which point we remain very confident that it will deliver a fourth-consecutive 50bp rate hike. However, until we reach this point, we expect AUD will largely remain driven by global themes," Nomura adds.