6 Sep 2013
Flash: A Confidence boost post election in Australia may be fleeting- RBS
FXstreet.com (Athens)-RBS FX Strategist Greg Gibbs notes that Australia goes to the polls this weekend and Tony Abbot leader of the opposition Liberal National Coalition Party is expected to be easily swept to power, ending the Labor Party’s six years (two terms) in power.
Key-quotes
“There are many that expect this to see a boost to business confidence, supporting the AUD.
“Business confidence has probably been depressed over the last year mainly because the current government had lost popularity and the Abbott opposition plans to reverse several major tax policies (carbon tax and mining tax), introduce a costly parental leave scheme and a so-called direct action plan.”
“The AUD recovery reflects the RBA reluctance to further cut rates with a housing market recovery gaining momentum, the recent improvement in Chinese activity and firmer commodity markets since June, and a bit of stability in EM currencies.”
“We doubt there will be much improvement in business confidence and this will limit the potential for a further significant recovery in AUD. We are wary of potential further weakness in EM markets and fear that the recent recovery in China may falter again later in the year.”
“As such see AUD again stalling at it approached 0.92/0.93.”
Key-quotes
“There are many that expect this to see a boost to business confidence, supporting the AUD.
“Business confidence has probably been depressed over the last year mainly because the current government had lost popularity and the Abbott opposition plans to reverse several major tax policies (carbon tax and mining tax), introduce a costly parental leave scheme and a so-called direct action plan.”
“The AUD recovery reflects the RBA reluctance to further cut rates with a housing market recovery gaining momentum, the recent improvement in Chinese activity and firmer commodity markets since June, and a bit of stability in EM currencies.”
“We doubt there will be much improvement in business confidence and this will limit the potential for a further significant recovery in AUD. We are wary of potential further weakness in EM markets and fear that the recent recovery in China may falter again later in the year.”
“As such see AUD again stalling at it approached 0.92/0.93.”