Bank recommends selling Dollar Index below 99.40, targets 98.00, while favoring long GBP and tactical AUD/NZD positions.
Westpac forecasts further declines in the Dollar Index, advising a sell if it breaks below 99.40 support. The bank targets 98.00 with a stop at 99.90, citing potential catalysts like a benign July CPI report and Strait reopening steps, though no trigger has emerged yet.
The bank maintains a long GBP basket trade initiated on July 10, betting on reduced UK political risk premiums. The basket is weighted heavily against EUR, with a 105 target from a 100 entry and a 98 stop. Westpac also eyes AUD/NZD around 1.2000, noting momentum toward 1.2100-1.2200, though its broader bias remains bearish on a downside break.
No immediate market reaction was noted, as Westpac awaits technical confirmation before entering positions.