6 Mar 2014
Flash: AUD fuelled by strong data - Westpac
FXStreet (Barcelona) - Sean Callow, of Westpac Global Markets Strategy Group feels that we can add Ukraine to persistent investor bearishness on China as the main headwinds for AUD/USD near term.
Key Quotes
“Otherwise, the story is looking brighter by the day. A notable improvement in US data looks to be still distant, chipping away at USD/majors. Importantly, the Australian data flow has improved markedly. Building approvals soared 35% y/y in Jan, setting the stage for strong activity in job-rich residential construction.”
“What’s more, in Jan Australia recorded its largest trade surplus since Aug 2011 and Feb Port Hedland iron ore export volumes were very strong. The 0.8% q/q, 2.8% y/y rise in GDP in Q4 included a notable rise in household consumption, followed by a broad-based 1.2% jump in retail sales in Jan. Our Economics team is increasingly positive on Q1 14 growth, while remaining wary of risks from mid-year (including the ongoing decline in business investment).”
“The RBA’s resumption of mild jawboning this week will encourage the China bears to ensure that AUD/USD makes hard work of a test of 0.91. And since employment has fallen short of consensus in 6 of the past 7 months, it is hard to be too optimistic over Feb employment (Thu). But the AUD domestic story suggests dips should be shallow - so long as Crimea is still seen as a regional problem.”
Key Quotes
“Otherwise, the story is looking brighter by the day. A notable improvement in US data looks to be still distant, chipping away at USD/majors. Importantly, the Australian data flow has improved markedly. Building approvals soared 35% y/y in Jan, setting the stage for strong activity in job-rich residential construction.”
“What’s more, in Jan Australia recorded its largest trade surplus since Aug 2011 and Feb Port Hedland iron ore export volumes were very strong. The 0.8% q/q, 2.8% y/y rise in GDP in Q4 included a notable rise in household consumption, followed by a broad-based 1.2% jump in retail sales in Jan. Our Economics team is increasingly positive on Q1 14 growth, while remaining wary of risks from mid-year (including the ongoing decline in business investment).”
“The RBA’s resumption of mild jawboning this week will encourage the China bears to ensure that AUD/USD makes hard work of a test of 0.91. And since employment has fallen short of consensus in 6 of the past 7 months, it is hard to be too optimistic over Feb employment (Thu). But the AUD domestic story suggests dips should be shallow - so long as Crimea is still seen as a regional problem.”