AUD/USD: bears are re-awakening - ANZ

Analysts at ANZ explained that the FX market has become focussed on the fast disappearing yield advantage in Australia, and the AUD bears are re-awakening.

Key Quotes:         

"We think that rates represent only a part of the story. The terms of trade, liquidity and valuation dynamics all look very different to the 2001 experience.

We do not think that the current narrowing in spreads can, in isolation, drive the AUD back below USD0.70. The evolution of global liquidity and the reaction of risk markets will be the key determinant. For now, and across our forecast horizon, we think that both of these factors remain supportive."