News

AUD looks vulnerable – Morgan Stanley

AUD/USD touched the lowest since Jan 4 earlier today

The RBA was downbeat on economic and inflation prospects for the Australian dollar in a report today. It fell as low as 0.7061 but has rebounded to 0.7092.

Morgan Stanley says there is scope for further losses.

Declining yield and interest rate differentials stand in contrast with its increasing foreign funding needs. Until now, Australia has bridged this gap by increasing equity-related inflows. That strategy worked in times of bullish risk appetite. But interest rate differentials are smaller and Australian asset valuations are increasingly dependent on foreign flows. As a result, AUD may decline faster than previously when risk appetite diminishes.

They suggest selling AUD/JPY it it hits 78.50 with a stop at 80.00 and target of 74.00. Spot is at 77.80.

ForexLive

Articles You May Like

EUR/USD buyers lose their grip as euro falls on ECB growth doubts
USD/CAD USD/CHF trade Best Forex Trading System 15 APR 2019 Review -forex trading systems that work
MACD DIVERGANCE TRADING SYSTEM
Automated wealth forex signals
How To Trade The London Breakout Forex Trading Strategy 👍

Leave a Reply

Your email address will not be published. Required fields are marked *