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Apr 05 - 09:55 AM

AUD: RBA Sets Stage For Potential Rate Hike As Soon As May; 2 Headwinds For Further AUD Gains N-Term - MUFG

By eFXdata  —  Apr 05 - 08:52 AM

MUFG Research discusses AUD outlook in light of the RBA April policy decision. 

"The Australian dollar has gained fresh upward momentum after the AUD/USD rate broke above the high from October of last year at 0.7556, and has since extended its advance back above the 0.7600-level for the first time since June of last year. It now looks like the pair is returning to the trading range that was in place during the 1H 2021 when it was trading for the most part between the 0.7600 and 0.7800-levels. The main fundamental trigger for upward pressure on the Australian dollar overnight was the hawkish policy shift in the RBA’s policy statement," MUFG notes. 

"The two potential headwinds to further Aussie strength in the near-term are: i) the ongoing slowdown in China although it had limited dampening impact in Q1, and ii) that it has already strengthened sharply in a short period of time. The Australian dollar has strengthened sharply by close to 8% against an equally-weighted basket of other G10 currencies over the last couple of months," MUFG adds. 

Source:
MUFG Research/Market Commentary

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