6 Nov 2013
Flash: Delay in Fed tapering to support AUD/USD on a 3 mth view - Rabobank
FXstreet.com (Barcelona) - RBA Governor Stevens was successful in talking down the AUD yet again, however, European traders challenged the bearish moves first seen in Asia bu taking the Aussie back up towards 0.9520+, with flows in the US, however, failing to materialize a clean breakout above the key resistance.
From Jane Foley, Senior Currency Strategist at Rabobank
"Positioning in the AUD has likely been hugely instrumental in the huge price swings exhibited by AUD/USD this year. Using CFTC data speculators were hugely long into the latter half of last year and, aside from a temporary clearout early this year, speculators marched from longs to shorts in May knocking the spot price down from the AUD/USD105.00 region to below 0.90."
"The weight of these shorts subsequently made the AUD susceptible to short-covering which fuelled the better tone in the AUD through September and early October.
"While short-covering may have led AUD/USD off its August lows we would argue that signs of stabilisation both in the domestic Australian economy and that of China were the triggers for the better tone in the AUD."
"On balance we expect that while hopes that the Fed will delay tapering could support AUD/USD on a 3 mth view that the AUD will be vulnerable into 2014. On a 12 mth view we see risk that AUD/USD could revisit this year’s low in the 0.88 region."
From Jane Foley, Senior Currency Strategist at Rabobank
"Positioning in the AUD has likely been hugely instrumental in the huge price swings exhibited by AUD/USD this year. Using CFTC data speculators were hugely long into the latter half of last year and, aside from a temporary clearout early this year, speculators marched from longs to shorts in May knocking the spot price down from the AUD/USD105.00 region to below 0.90."
"The weight of these shorts subsequently made the AUD susceptible to short-covering which fuelled the better tone in the AUD through September and early October.
"While short-covering may have led AUD/USD off its August lows we would argue that signs of stabilisation both in the domestic Australian economy and that of China were the triggers for the better tone in the AUD."
"On balance we expect that while hopes that the Fed will delay tapering could support AUD/USD on a 3 mth view that the AUD will be vulnerable into 2014. On a 12 mth view we see risk that AUD/USD could revisit this year’s low in the 0.88 region."