AUD: Fundamental support strengthened - Westpac

In view of Sean Callow, Research Analyst at Westpac, a busy week of domestic data has strengthened AUD’s fundamental support as Australian business conditions remain consistent with solid expansion, consumer sentiment rose 2.8% in Nov and most importantly, key readings from the labour market were positive.

Key Quotes

“Wages growth remains soft by pre-GFC standards but is at least trending away from inflation (2.3% vs 1.9%). This matched market expectations but the 33k bounce in jobs that kept the unemployment rate at 5.0% was a positive surprise.”

“Market pricing for an RBA rate hike by Nov 2019 ticked above 70% and the quiet calendar near term should leave the positive local vibe intact. Commodity prices have softened but remain well above July lows.”

“We retain a positive weekly bias but whether AUD/USD can extend towards 0.7350 and beyond probably depends on the latest US-China trade headlines.”