Key Market Views: Receiving Australian Rates

The Oceanic currencies are firmly on the ropes, and key downside breaks in US$/AUD and US$/NZD appear to play into our long-held bearishness on both currency pairs. Regular readers will be well versed in our fundamental disliking of Australia - an overarching reliance on Chinese import demand, a near-bursting property market and a large net external deficit, just to name a few. However, the technical break witnessed this morning at US$0.8575/AUD has really taken the bearish momentum up a notch. Given the decisive breach of this level, we reiterate that US$0.8150/AUD target could come into focus pretty quickly.

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