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Oct 28 - 12:55 PM

AUD: Positioning For Extremes; Vulnerable To A Short Squeeze - ANZ

By eFXdata  —  Oct 28 - 10:45 AM

ANZ Research discusses AUD outlook and sees a scope for further gains over the coming months.

"Recent weeks have been positive for the AUD as improving sentiment domestically, and globally spurred outperformance against major crosses. Domestically, the growth outlook is beginning to improve as high vaccination rates and easing mobility restrictions set the stage for a strong rebound in activity. The extent to which this feeds into wages and inflation will become increasingly important for policy, as the economy reopens," ANZ notes. 

"The re-pricing of global front-ends has reflected shifting market and policy views amid more persistent inflation pressures. For now, this should reduce inflation uncertainty, providing a more sustainable base for growth. With AUD short positioning still at historical extremes, we think the AUD remains vulnerable to a short squeeze, as stabilising global growth and favourable seasonality come into play," ANZ adds. 

Source:
ANZ Research/Market Commentary

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