29 Oct 2013
Flash: AUD underperforms -BTMU
FXstreet.com (London) - Lee Hardman, strategist at The Bank of Tokyo-Mitsubishi UFJ explained the Australian dollar has underperformed in the Asian trading session with the AUD/USD rate extending its recent retracement lower after failing to break above resistance from its 200-day moving at around 0.9750 on the 23rd October.
Key Quotes:
“Australian dollar weakness has accelerated overnight following comments from RBA Governor Stevens who stated that the Australian dollar is likely to be “materially lower” at some point with its current elevated level not supported by relative costs and productivity”.
“Governor Stevens also stated that Australia’s terms of trade are likely to fall further not rise which will also weigh upon the Australian dollar. The comments highlight that the Australian dollar is currently viewed as being highly
overvalued”.
“However with Fed QE tapering delayed into 2014, the Australian dollar should continue to derive support from carry demand in the near-term”.
Key Quotes:
“Australian dollar weakness has accelerated overnight following comments from RBA Governor Stevens who stated that the Australian dollar is likely to be “materially lower” at some point with its current elevated level not supported by relative costs and productivity”.
“Governor Stevens also stated that Australia’s terms of trade are likely to fall further not rise which will also weigh upon the Australian dollar. The comments highlight that the Australian dollar is currently viewed as being highly
overvalued”.
“However with Fed QE tapering delayed into 2014, the Australian dollar should continue to derive support from carry demand in the near-term”.