19 Nov 2013
Flash: AUD and RBA jawboning - Rabobank
FXstreet.com (London) - Jane Foley, Senior Currency Strategist at Rabobank
said it is easy to have sympathy for the RBA’s view that the level of the AUD is “uncomfortably high”.
Key Quotes:
“After all the currency has been overvalued against most measures of fair value for years. When the mining investment boom ended it became all too clear that the rest of the economy was left very exposed to damage implied by exchange rate strength”.
“In view of the need to protect the economy’s external sector it is a logical step for the RBA to include a sentence in its policy statements aimed at undermining the value of the AUD”.
“The minutes of the RBA’s November meeting point out that the domestic economy has been “expanding at a below trend place” recently. Growth is expected to remain below trend over the coming year but “could reasonably be expected to pick up thereafter””.
“It was not all bad news, however. The RBA point to a range of indicators that showed that dwelling investment was picking up and was likely to continue”.
“We expect steady rates from the RBA for some time”.
“Looking ahead the AUD is likely to be buffeted mostly by domestic and Chinese economic data. The positive reception to last week’s news of Chinese structural
“Near-term the 50 day sma is likely to provide some resistance at AUD/USD0.9446”.
said it is easy to have sympathy for the RBA’s view that the level of the AUD is “uncomfortably high”.
Key Quotes:
“After all the currency has been overvalued against most measures of fair value for years. When the mining investment boom ended it became all too clear that the rest of the economy was left very exposed to damage implied by exchange rate strength”.
“In view of the need to protect the economy’s external sector it is a logical step for the RBA to include a sentence in its policy statements aimed at undermining the value of the AUD”.
“The minutes of the RBA’s November meeting point out that the domestic economy has been “expanding at a below trend place” recently. Growth is expected to remain below trend over the coming year but “could reasonably be expected to pick up thereafter””.
“It was not all bad news, however. The RBA point to a range of indicators that showed that dwelling investment was picking up and was likely to continue”.
“We expect steady rates from the RBA for some time”.
“Looking ahead the AUD is likely to be buffeted mostly by domestic and Chinese economic data. The positive reception to last week’s news of Chinese structural
“Near-term the 50 day sma is likely to provide some resistance at AUD/USD0.9446”.