The Australian dollar remains the strongest currency in the G10 since the invasion, followed by fellow commodity-linked currencies. Although AUD/USD has been through intense selling pressure in the last couple of days, the current pullback is set to be short-lived, economists at Westpac report. 

AUD/USD gains to cap in the 0.7650/0.7700 area near-term

“This pullback should find support at around 0.7460.”

“Clearly the extraordinary surge in energy and metals prices strengthens Australia’s already large trade surpluses. Still, the RBA’s slow shuffle towards finally commencing tightening contrasts with an FOMC openly considering 50bp hikes.” 

“CFTC positioning data shows many AUD shorts have now been unwound. This should help cap AUD/USD in the 0.7650/0.7700 area near-term, though we expect dips to be modest multi-month.”