22 Jul 2013
Flash: Chinese data to help AUD cause – Westpac
FXstreet.com (New York) - The AUD/USD bounced higher last week in a kneejerk response to the PBoC announcement that it is scrapping controls on banks’ lending interest rates, notably the long-standing floor of 70% of the benchmark rate, notes Sean Callow, a Global FX Strategist at Westpac.
Key quotes
The AUD faded back below the 0.9200 level into the weekend and remains near that level during Asian trading. “Friday’s CFTC report showed speculators in currency futures stopped short-covering AUD and indeed extended net shorts to -70.7K, marginally larger than two weeks earlier and thus a record net short in the series, which began in 1992.”
As such, “There is plenty of fuel for short-covering rallies if the news flow is supportive but we doubt this week’s China PMI and Australian Q2 CPI (both Wednesday) will help AUD’s cause.”
Key quotes
The AUD faded back below the 0.9200 level into the weekend and remains near that level during Asian trading. “Friday’s CFTC report showed speculators in currency futures stopped short-covering AUD and indeed extended net shorts to -70.7K, marginally larger than two weeks earlier and thus a record net short in the series, which began in 1992.”
As such, “There is plenty of fuel for short-covering rallies if the news flow is supportive but we doubt this week’s China PMI and Australian Q2 CPI (both Wednesday) will help AUD’s cause.”