AUD/USD to remain stuck in the middle of 0.63 – 0.65 range: China woes, dovish RBA

<p>This snippet via Mizuho on the Australian dollar. In a (very) brief summary of the piece:</p><p>China Woes: </p><ul><li>The sheer magnitude of balance sheet and cash-flow shocks mean stimulus, including rate cuts are mere signals not solutions.</li><li>Especially as further property sector and wealth management product risks threaten with fresh
balance sheet and cash-flow shocks.</li><li>fresh assaults on CNY stability pose an overarching policy challenge and dilemma; given
sharp stimulus and stability trade-offs.</li></ul><p>And thus to the AUD:</p><ul><li>only just averting a slip back below 0.64 and hardly showing any signs of traction.</li><li> One reason for this is that clarity on Chinese measures to revive a construction boom continue to
elude.
</li><li>And even for optimists, it appears that it will take a while to get the economy back on its feet.
– In which case, commodity channel drag forces on AUD are not materially reversed into a boom.</li><li>What's more, perceptions of a more dovish RBA also stand in stark contrast to continued G10
tightening elsewhere.</li><li>For now AUD could remain under the weather in the mid-0.63 to 0.65 range.</li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.