Westpac foreign exchange news – 30 June

Rob Rennie Westpac’s Global Head of FX & Commodities Strategy, discusses the busy week in central banking world with much more upbeat guidance on the outlook for growth and raising market pricing for rate hikes later in 2017. ECB President Draghi stated “the threat of deflation is gone and reflationary forces are at play”; Bank of Canada Governor Poloz that “It does look as though those cuts have done their job"; and Bank of England Governor Carney that “Some removal of monetary stimulus is likely to become necessary”. This bout of optimism currencies this week with the EUR and GBP leading the charge. The A$ has also benefited with higher iron ore helping too. However, Robert sees the A$ as likely to be capped by 0.77/ 0.7750 given the RBA has already fully acknowledged “the broad based pickup in the global economy”.