3 Feb 2015
Little in the way for AUD's move towards $ 0.72 – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, views that with no significant support seen for AUD/USD towards 0.72, the likelihood of RBA’s desire for a weaker AUD is likely to be fulfilled.
Key Quotes
“The RBA’s decision to cut the OCR 25bps was at least partially factored into the curve but the impact on the currency has been impressive. We have changed out outlook for RBA policy and now anticipate a further cut in the cash rate in May.”
“The RBA cited below trend growth and the stable inflation outlook in its policy statement but also noted that the AUD remains above “most estimates of its fundamental vale, particularly given the decline in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy”.”
“The RBA clearly wants a weaker exchange rate and seems likely to get it.”
“Technically, there is little in terms of major support for the AUD on the charts until the 0.72 retracement (76.4% of the 2008/2011 rally)/longer-term congestion zone.”
Key Quotes
“The RBA’s decision to cut the OCR 25bps was at least partially factored into the curve but the impact on the currency has been impressive. We have changed out outlook for RBA policy and now anticipate a further cut in the cash rate in May.”
“The RBA cited below trend growth and the stable inflation outlook in its policy statement but also noted that the AUD remains above “most estimates of its fundamental vale, particularly given the decline in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy”.”
“The RBA clearly wants a weaker exchange rate and seems likely to get it.”
“Technically, there is little in terms of major support for the AUD on the charts until the 0.72 retracement (76.4% of the 2008/2011 rally)/longer-term congestion zone.”