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Credit Agricole: RBA to stay cautious as AUD remains vulnerable to risk sentiment - eFXnews

FXStreet (Łódź) - The eFXnews team comment that Credit Agricole expects the RBA to remain on hold this week, as iron ore and coal prices continue dropping.

Key quotes

"The 4.2% decline in the AUD trade-weighted index since its September high will likely be welcome news to RBA board members’ as they enter their policy setting meeting this week."

"Even so, we do not expect RBA caution to change meaningfully with declining iron ore and coal prices reinforcing the Australian economy’s vulnerability to Chinese growth."

"In this respect, many of next week’s Australia data releases (even employment) may prove secondary in nature, overshadowed by anticipation of Friday’s September China loans data. Such loans data will need to show at least moderate improvement to offset the negative impact of rising US rates following Friday’s stronger US-payrolls number."

"Indeed AUD, like many of its high-yielding FX peers, it likely to prove increasingly vulnerable to risk sentiment in the month ahead as the cost of USD-funding rises."

'This content has been provided under specific arrangement with eFXnews.'

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