The Australian dollar fell and recovered on the ebb and flow of the news related to trade wars. The focus now shifts to the
Here is their view, courtesy of eFXdata:
BNP Paribas Research discusses AUD outlook into next week’s RBA meeting and notes that shorts looks stretched which makes AUD prone to a bounce on any hawkish tilt from the RBA.
“The Reserve Bank of Australia (RBA) meets on 3 July. The RBA continues to reiterate a dovish message and as a result rates markets only price the first hike by Q4 2019. BNP Paribas Positioning Analysis shows that AUD short positioning (along with NZD and CAD) has built quickly in recent weeks as trade war concerns challenged risk sentiment.
AUD short exposure currently stands at -18 (-/+ 50 scale) from a neutral score at the beginning of June.
Given short FX market positioning and dovish RBA expectations, the currency should benefit from even an incrementally more hawkish RBA message or any improvement in risk sentiment,†BNPP argues.
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