Westpac with a 1 to 3 month outlook for the AUD

TL;DR is:

  • We look for 0.74 end-September

More:

The Aussie underperformed in the weeks of broad US dollar strength following the FOMC and ECB mid-June meetings but so far in July it has been near the middle of the G10 pack.

Weighing on AUD have been a pullback in key commodity prices, especially metals,

  • bouts of investor concern over US-China trade tensions
  • and the Fed's ongoing optimism on the US economy.

But support on dips has come from

  • the relative brevity of trade-driven equity declines
  • and Australian data generally decent enough for the RBA to maintain its bullish growth forecasts