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Antipodeans Keep Lagging Behind


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Remaining Under Pressure

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FOREX: Westpac note that "GBP is just one of many currencies the AUD
outperformed thru April as global risk appetite improved. A$'s positive
correlation with equities & global growth prospects was prominent in the
GFC/afterwards & remains intact this year. The durability of the rebound in risk
appetite is the key question for AUD. Supportive factors include open-ended QE
programs by major central banks, FX swaps lines & plans by many OECD gov'ts to
loosen COVID-19 restrictions. The latter raises the prospect of a considerable
rebound in the global econ in H220. We exp. that the extended period of brutal
economic data & waves of earnings downgrades globally will weigh on risk
appetite including equities in coming weeks. Moreover, doubts over the scale of
the exp. recovery may grow. Both the RBA & BoE are pursuing very expansionary
MonPol & fiscal support is substantial, especially in Aus, where the C/A
position is much more supportive & Australia's much lower COVID-19 case count
should mean a quicker restarting of econ activity in Aus. These factors should
ensure AUD remains well above Mar lows but given our baseline view on global
risk appetite, we see AUD/GBP 0.5050/0.5100 or GBP/AUD 1.96-1.98 multi-week."
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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