AUD/USD to target 0.70 after another dovish signal from the RBA – OCBC

Terence Wu, FX Strategist at OCBC Bank, expects the AUD/USD pair to target 0.7000 on the immediate horizon, before 0.6800 in a multi-session horizon after having breached the 0.7050 support on Tuesday. What’s more, RBA’s Kent suggested that it will not unexpected if short-term interest rates in Australia turned negative and the market is set to perceive that as yet another signal for a dovish Reserve Bank of Australia (RBA).

Key quotes

“The AUD/USD traded heavy after comments by RBA’s Kent that it would not be unexpected for short term rates to go below zero.” 

“Looking forward, the combination of shaky risk sentiment and dovish RBA is expected to impart downward pressure on the aussie.” 

“Immediate support is now at 0.7000 with 0.6800 the next level if breached.”