AUD/USD: Strong headwinds - Westpac

AUD/USD has faced some strong headwinds in the past week and the AU-US yield spreads continue to trend in USD’s favour as Fed officials reiterate their plans to keep raising interest rates, while the RBA has returned from its summer holidays sounding decidedly neutral, according to Sean Callow, Research Analyst at Westpac.

Key Quotes

“Then of course we have the return of equity volatility, which historically is bad news for the Aussie. Our weekly fair value estimate had already slipped to around 0.7550 as of last Friday. So while the near-3 cent spot fall since late Jan is in the direction the model across suggests, there could be more to go.”