Westpac Flag The Likelihood Of 2-Way Price Action During Remainder Of Year

Westpac note that "the Aussie absorbed a lot of pressure in September, as it slipped from well above $0.7400 to under $0.7200. China's property sector was in particular focus and the U.S. dollar was supported by an upbeat Fed and safe haven demand. But the Aussie has rallied strongly so far in October, backed by the price squeeze on key commodity exports such as coal, metals and LNG. It is not clear how much more support A$ will garner from this source, as China steel output finally retreats. Domestically, NSW's Covid situation has improved dramatically in recent weeks and Australia's unemployment rate may remain under 5.0%. But the RBA continues to insist that wages growth and inflation will remain muted, keeping the cash rate at a globally unattractive 0.1% into 2024. Near term AUD/USD could spend some time in the $0.75-0.76 area but price action should become more two-way over Q4 and our year-end target remains $0.75."