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4 Nov 2013
Flash: AUD/USD, upside potential near term - RBS
FXstreet.com (Barcelona) - According to Greg Gibbs, FX Strategist at Royal Bank of Scotland, the Reserve Bank of Australia will have to acknowledge better sentiment and economic conditions at its monetary meeting on Tuesday, an outcome that coupled with the prospects of 'non-taper' by the Fed until March, at least, leads Gibbs to recommend an upside bias on the AUD/USD.
Key Quotes
This week is the RBA’s Melbourne Cup day policy meeting. This will be the first time in a number of years that punters won’t have to worry whether or not the RBA will change rates. Recent comments by RBA Glenn Stevens that described the AUD as “unusually high” before its recent rally from around 90cents, suggests that the policy statement will emphasis downside risks to the economy form a high exchange rate. "
"However, most activity and sentiment surveys since the last meeting have continued their recent improvement. Furthermore, the CPI data released since the last meeting were above expected. So there is no way this statement can be more dovish."
"Thursday the Australian employment data are released followed by the RBA’s quarterly statement on monetary policy on Friday. This will be important for setting out the outlook for the economy and rates."
"Since the August statement, the RBA will be under some pressure to raise their forecasts for inflation and growth, and should sound cautiously up-beat; although they are likely to remain just below trend growth in 2014 and see inflation remaining in its target range of 2 to 3%."
"The AUD now looks low relatively the improvement in its yield advantage over the USD recently and thus we continue to see upside potential near term."
Key Quotes
This week is the RBA’s Melbourne Cup day policy meeting. This will be the first time in a number of years that punters won’t have to worry whether or not the RBA will change rates. Recent comments by RBA Glenn Stevens that described the AUD as “unusually high” before its recent rally from around 90cents, suggests that the policy statement will emphasis downside risks to the economy form a high exchange rate. "
"However, most activity and sentiment surveys since the last meeting have continued their recent improvement. Furthermore, the CPI data released since the last meeting were above expected. So there is no way this statement can be more dovish."
"Thursday the Australian employment data are released followed by the RBA’s quarterly statement on monetary policy on Friday. This will be important for setting out the outlook for the economy and rates."
"Since the August statement, the RBA will be under some pressure to raise their forecasts for inflation and growth, and should sound cautiously up-beat; although they are likely to remain just below trend growth in 2014 and see inflation remaining in its target range of 2 to 3%."
"The AUD now looks low relatively the improvement in its yield advantage over the USD recently and thus we continue to see upside potential near term."