From the FXWW Chatroom: We see AUD vulnerability coming from four angles. First, China has achieved better than expected GDP growth, but it appears the economy has become more unbalanced. We expect China to slow down from here. Second, the USD is expected to rally with the help of steeper yield curves. Third, Australia’s labour market has developed early weakness. With mining investment staying weak and housing slowing down, two important pillars for employment growth have weakened. Fourth, the new RBA Governor Lowe seems to be leaning towards the dovish side. This week’s CPI release is being watched by markets. The risk to this trade is a rise in iron ore prices.
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