2 Dec 2013
Flash: AUD dominated by two events
FXstreet.com (London) - Strategists at BBH said that while the Reserve Bank of Australia is not expected to change the cash rate which stands at a record low 2.50%, it may still keep the door open to further easing in 2014.
Key Quotes:
“The roughly 4% decline of the Australian dollar on a trade-weighted basis since late October is still insufficient to bring it down to fair value”.
“The news stream may be dominated by two other events in Australia. First, the Australian government is expected to sell an A$1.5 bln 5-year bond, the nation's largest sale in two decades”.
“Second, investors are still digesting the implications of the government's rejection of the ADM bid for GrainCorp. That said, as we noted in our technical outlook, the downside momentum on the Australian dollar looks to be easing and market positioning (illustrated by six consecutive losing weeks) vulnerable to a short squeeze”.
Key Quotes:
“The roughly 4% decline of the Australian dollar on a trade-weighted basis since late October is still insufficient to bring it down to fair value”.
“The news stream may be dominated by two other events in Australia. First, the Australian government is expected to sell an A$1.5 bln 5-year bond, the nation's largest sale in two decades”.
“Second, investors are still digesting the implications of the government's rejection of the ADM bid for GrainCorp. That said, as we noted in our technical outlook, the downside momentum on the Australian dollar looks to be easing and market positioning (illustrated by six consecutive losing weeks) vulnerable to a short squeeze”.