Strategists at Westpac see the Aussie dollar heading towards sub-0.7000 levels in the medium term. Key Quotes “AUD price action has been very mixed lately: clear underperformance post-US NFP then a degree of resilience in the face of heavy equity losses in Europe, Japan and the US”. “Admittedly, this week's lunar new year holidays argue for caution in drawing firm conclusions just yet”. “Providing some insulation from equity-driven AUD selling, Australia’s key commodity prices have rallied sharply since late Jan, with the Westpac Australian Export Commodity Index up about 6%”. “Moreover, our expectation that the RBA will not resume cutting the cash rate should help limit the downside for AUD/USD multi-day/week to say 0.6850-0.6900”. “Further out (Q2 onwards), our expectation is that AUD/USD will weaken sub 0.70 as the Fed should still raise rates well before markets are pricing (we look for June) and ample supply of key commodities will limit the extent of price rallies”. For more information, read our latest forex news.