22 Jul 2013
Flash: AUD/USD, 0.93 to mark a cap in the recovery - BBH
FXstreet.com (Barcelona) - The ability by the AUD/USD to bounce further away from 0.90, which came on the back of the market pricing out the 'Septaper' done deal, China bank lending floor rate news last Friday and second thoughts about an RBA rate cut in early August, will now be most likely at the mercy of Australian CPI data due early on July 24.
According to Marc Chandler, Head of FX at BBH, "this is seen a pivotal for market expectations", adding that "we expect that despite the 12.3% decline against the US dollar in Q2 and a depreciation of around 10% on a trade weighted basis, price pressures likely did not accelerate."
While the Aussie gains may accelerate towards $0.9300, this level "should mark a cap in the first part of the week, with the CPI (if we are right) renewing speculation of a rate cut, which would see the Aussie reverse lower" Chandler said.
According to Marc Chandler, Head of FX at BBH, "this is seen a pivotal for market expectations", adding that "we expect that despite the 12.3% decline against the US dollar in Q2 and a depreciation of around 10% on a trade weighted basis, price pressures likely did not accelerate."
While the Aussie gains may accelerate towards $0.9300, this level "should mark a cap in the first part of the week, with the CPI (if we are right) renewing speculation of a rate cut, which would see the Aussie reverse lower" Chandler said.