AUD/USD: We continue to see compelling reasons to be short – Morgan Stanley
Although AUD/USD bounces off a yearly low, snapping a four-day downtrend, Morgan Stanley stays bearish on the Aussie currency pair, targeting 0.7000 with a stop-loss point of 0.7800.
Markets are pricing in excessive RBA hawkishness, with liftoff now fully priced for July 2022, compared to RBA guidance for 2024.
Higher US real yields and tighter breakevens suggest a weaker AUD. COVID-19 risks remain asymmetrically negative in Australia, particularly with the more transmissible Delta variant.
Rising concerns about global growth (as evident in the distribution of equity returns) should be AUD/USD-negative
Read: AUD/USD: Bearish impulsive remains intact above 0.7300 ahead of Aussie Retail Sales
via FXStreet News https://ift.tt/3tYkUTd
July 20, 2021 at 06:07PM