📝Prefer to Sell AUD/USD On Rallies, Target 0.6200: Westpac Strategy

The Aussie will not resist the Fed-driven bullish USD undertow and our preference remains to sell AUD/USD rallies to 0.6520, targeting 0.6200. But with crude oil up 10%+ in the last month, coking coal futures 25%+ over the same period and iron ore prices holding reasonably firm at around $120/t - notwithstanding China doubts - AUD is looking better placed on some crosses.

The higher for longer global central bank narrative and a strong 65k+ Aug jobs report have nudged RBA terminal rate expectations higher and out into Q2 next year. That creates some additional appeal for AUD, especially against the likes of GBP and EUR, where rate expectations are cooling, but it’s barely keeping pace with the more hawkish reprofiling of the Fed curve. - Westpac Strategy