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Sep 2, 2014
AUD's resilience to wear down - Rabobank
FXStreet (Bali) - Jane Foley, FX Strategist at Rabobank, notes that looking forward soft economic data releases should pressure the AUD.
Key Quotes
"Looking forward we expect that soft economic data releases will wear down the current resilient tone of the AUD. Not only does the week ahead bring the release of the Q2 GDP report but retail sales and trade data are due."
"In addition, the RBA meeting is scheduled for September 2. Surveys suggest that the RBA is universally expected to keep rates on hold. While the official Capex data should bolster the mood of the policy makers, it is clear that headwinds still cloud the outlook and this suggests risk that the RBA could again attempt to jawbone the AUD to lower levels."
"That said, the AUD is still seen as offering positive carry and we expect that this will limit downside potential in AUD/USD near-term. Over the coming 3 mth we expect the AUD/USD 0.92 to 0.93 to contain most activity. On a 12 mth view, we look for a move towards 0.86. This assumes a broad based recovery for the USD as the first hike in the Fed funds rate near."
Key Quotes
"Looking forward we expect that soft economic data releases will wear down the current resilient tone of the AUD. Not only does the week ahead bring the release of the Q2 GDP report but retail sales and trade data are due."
"In addition, the RBA meeting is scheduled for September 2. Surveys suggest that the RBA is universally expected to keep rates on hold. While the official Capex data should bolster the mood of the policy makers, it is clear that headwinds still cloud the outlook and this suggests risk that the RBA could again attempt to jawbone the AUD to lower levels."
"That said, the AUD is still seen as offering positive carry and we expect that this will limit downside potential in AUD/USD near-term. Over the coming 3 mth we expect the AUD/USD 0.92 to 0.93 to contain most activity. On a 12 mth view, we look for a move towards 0.86. This assumes a broad based recovery for the USD as the first hike in the Fed funds rate near."