AUD/USD: BNP Paribas thinks it's time to sell the AUD

BNP Paribas believes that the AUD/USD offers a selling trade opportunity on the forex.

"The AUD/USD rally seems to be over in light of the recent RBA rate decline. However, our STEER model of short-term equilibrium rates signals that the rally is strongly linked to equities rather than relative rate levels.

As the markets integrate increasingly likely Fed rate hikes in September, risk sentiment and shares could fall under pressure, which would be negative for the AUD.

c69

We believe that Yellen's speech at Jackson Hole on 26 August could be a catalyst for stronger rate hike expectations. Therefore, we believe that the AUD/USD is expected to fall back down in the short term."