The Australian dollar was on the back foot after Trump’s victory while the pound managed to weather part of the storm. What’s next? Here is the view from BNP Paribas:
Here is their view, courtesy of eFXnews:
Commodity currencies and oil traded moderately lower. the USD is rising broadly, which we think will pressure commodity prices lower and push USDCNY higher, and higher US rates makes the already-poor carry on the commodity bloc currencies look even less attractive.
We think the stronger USD will ultimately dominate these pairs and would fade AUDUSD attempts above 0.78 even if the data, together with continued gains in copper prices, may provide some support for the AUD in the short-term. We also see scope for the AUD to give back some gains vs. the CAD, particularly if iron ore prices correct lower.
Despite a strong performance last week, Cable has been lower today because of broad USD strength. We still expect recovery to 1.28 in the weeks ahead.
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