ANZ note that "the AUD lifted after the......>

AUSSIE: ANZ note that "the AUD lifted after the change of PM last week. Fears of

early elections & policy uncertainty have eased, as markets seem confident that

the new PM, Scott Morrison, is able to deliver political continuity. Also

helping lift sentiment are the PBoC's implied commitment to a stable CNY policy

& the news of China easing monetary policy. The latter should bring some

stabilisation in China's growth over H2. Even so, the AUD looks like it can't

catch a break. Widening interest rate differentials vis-a-vis the USD, an

unsupportive risk backdrop & the US-China trade tiff have pushed the AUD lower

over the year. In our view, these stories will weigh on the medium term outlook.

And we think the global risk/growth backdrop will increasingly challenge

cyclical currencies like the AUD. The deceleration in Australia's housing prices

combined with ballooning household debt are risks to domestic growth & are more

reasons to be cautious about the medium term direction of the AUD. The USD's run

higher seems to be moderating (as the growth divergence narrative is less of a

driver), and this should remove a headwind for the AUD. However, while we watch

the USD profile, we see the AUD/USD falling to $0.70 over the coming weeks."