AUD/USD gains capped around 0.77 – Westpac

According to strategists at Westpac, AUD’s upside appears somewhat limited around the 0.7700 handle in the near term.

Key Quotes

"AUD/USD found fresh buyers and pricing for a May rate cut faded to below 30% after the strong Mar NAB business survey”.

“However, much is still at stake for AUD in Thursday’s Mar labour force data. The 120k jobs surge Oct-Nov is looking even more like statistical noise, being followed by a net -7k over summer. A soft reading would come ahead of what should be muted Q1 inflation 27 April. Westpac’s call for above-consensus readings on both jobs (25k) and the unemployment rate (6.0%) is a mixed bag, likely to ensure a reasonable risk premium persists for a May rate cut, keeping a lid on AUD/USD around 0.77”.

“USD/JPY remains a wild card, this week’s emerging stability despite an unconvincing intervention threat encouraging for risk appetite and thus AUD. China data Friday also looms but hasn’t done much damage to AUD for some time”. 

“Overall AUD/USD bias is neutral, trading mostly 0.75-0.77, but with the US outlook leaving open the chance of a test of 0.78 multi-week”.