What's the trade ahead of the RBA
The RBA decision is at 0330 GMT.
Credit Agricole CIB Research discusses AUD outlook from positioning front. CACIB maintains a short AUD/USD exposure in spot targeting a move towards 0.74 (spot 0.7634).
"According to our FX positioning gauge, the AUD was sold for most of the last week with downside being primarily driven by increased selling interest from speculative oriented investors such as hedge funds...Our positioning based model turns neutral on the currency," CACIB notes.
"However, depending on external factors such as risk sentiment, downside risks remain intact. Hence, we keep a cautious stance which remains reflected in our fundamentally driven short AUD/USD trade recommendation," CACIB adds.
Meanwhile, Citi notes three things to watch for in today's decision.
"CitiFX Strategy expects the RBA will: (1) upgrade economic forecasts for Australia; (2) not announce any new policy adjustments to LSAP or YCC; (3) mention recent currency strength," Citi notes.
"In aggregate, we see this as being tactically negative for AUD, though would add on dips after the meeting as the structural AUD bullish case remains intact," Citi adds.
