The RBA left the policy rate unchanged at 2.0%, versus market pricing for 30% probability of a 25bp rate cut and im sympathy AUD is a touch firmer.
In this regard, BNP Paribas favors fading any rallies above 0.7200 in AUD/USD for the following 3 reasons:
1) BNPP Positioning Analysis signals FX investors no longer hold a sizeable short AUD position following last month’s rally
2) the bounce in AUDUSD in recent days has brought the pair back towards its STEER fair-value, indicating room for a further squeeze higher is more limited
3) the RBA remains highly sensitive to AUD strength, BNPP clarifies.