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Increased risk of changes to the RBA statement wording - Westpac

FXStreet (Bali) - According to Sean Callow, FX Strategist at Westpac, there is an increased risk of changes to the RBA statement wording today.

Key Quotes

"In terms of potential to move markets, the RBA statement dominates the calendar (2:30pm Syd/11:30am Sing/HK). Again there is no tension over the 2.5% cash rate but this month there is an increased risk of changes to the statement wording. The largest monthly drop in AUD since May 2013 needs to be acknowledged and it is no longer so obvious that AUD “remains above most estimates of its fundamental value”, though the RBA may keep this anyway."

"We expect the statement to conclude that “the most prudent course is likely to be a period of stability in interest rates”, the phrase used at every meeting this year, though the clock is ticking on these words. But the RBA’s closer focus on excessive investor demand for housing needs to be highlighted, so the statement overall seems likely to be no worse than neutral for AUD and more likely slightly supportive."

"China’s markets remain closed today, finally reopening tomorrow. The sharp reduction in numbers of street protesters in Hong Kong is likely to support CNH and the Hang Seng. The regional calendar is busy with second tier releases: Sep CPI in Philippines and Thailand, India’s Sep HSBC PMIs, Aug trade for Malaysia, Sep trade for Taiwan. Bank Indonesia is universally expected to hold steady at 7.50% but the accompanying commentary should be noteworthy, given the rupiah’s recent fall to lows dating to Q1 2009."

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