Westpac recommend selling AUD/USD at.........>

AUSSIE: Westpac recommend selling AUD/USD at $0.6985 with a target of $0.6800

and with a stop at $0.7030.

- Westpac reason that "while today's RBA rate cut was as expected, the RBA left

in place an easing bias noting that "the Board will continue to monitor

developments in the labour market closely and adjust monetary policy to support

sustainable growth in the economy". Westpac is forecasting the next cut in

August. Over and above the 'labour market focus easing bias', the RBA also noted

that the "the downside risks stemming from the trade disputes have increased".

This is an upgrade to 'trade war' related offshore risks, after last month

noting that "outlook for the global economy remains reasonable, although the

risks are tilted to the downside". We see the A$ as being capped by 0.70 near

term being the midpoint of our fair value band on the basis that offshore risks

are rising. In this environment, with iron ore feeling like it has peaked as

Australian supply has recovered, the A$ should underperform."