"The minutes from the Reserve Bank of Australia's September meeting signalled that the RBA is in no hurry to make any changes to current settings, consistent with the view from our economists that they are unlikely to cut rates further, and consistent with AUD rates market pricing for minimal easing over the next 12 months. We do not think RBA rate cuts are required for AUDUSD to weaken.

BNP Paribas STEER, our short-term fair value model, signals the key driver of AUDUSD is global equities: a 5% decline in MSCI world corresponds with a 3.5% decline in AUDUSD's STEER.

Given our economists' expectations for a Fed rate hike at tomorrow's meeting, we see the risk environment as vulnerable and continue to recommend short AUDUSD through options".

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