Westpac: Aussie Dollar Facing a “Toxic” Force Against the US Dollar

According to Sean Callow, a foreign exchange strategist at Westpac, the Australian dollar against the US dollar is facing a “toxic” force that could lead to a significant decline.

The recent pause signal from the Federal Reserve hasn’t weakened the US dollar, as the surge in long-term government bond yields has provided new support for yields.

He stated that unless the Jackson Hole meeting brings dovish surprises, the US dollar seems poised for further gains.

Currently hovering around 0.6200, the Aussie dollar against the US dollar lacks clear support.

He added that the modest tone from the Reserve Bank of Australia in August appears to be a backdrop of adverse factors for the Australian dollar rather than the primary driver for its decline.