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RBA unlikely to remove AUD language from statement - TDS

FXStreet (Bali) - Prash Newnaha and Annette Beacher, FX Strategists at TD Securities, note that the RBA will be very happy with the AUD price action seen recently, although they still expect the RBA to keep the 'too high AUD' language on its next policy statement on Oct 7th.

Key Quotes

"We suspect the RBA will be very happy with the AUD price action. The AUD has declined after months of jawboning, the move playing out in an orderly fashion, without panic."

"We are still a few cents away from the RBA’s soft target of $US0.85 but that is perhaps when the RBA jawboning may ease off."

"One way the RBA could relay this message sooner is by not mentioning ‘historically high’."

"At this stage though we think it unlikely the RBA will remove such language for it is only now that the currency has really moved as per the RBA’s playbook."

"Whether they do so will be highly conditional on how far the AUD falls between now and Oct 7."

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