9 Aug 2013
Flash: AUD/USD rout probably over - TDS
FXstreet.com (Barcelona) - TDS is now shifting to a ‘neutral’ stance in the AUD/USD after 0.90 target was met, and following the ‘not so dovish’ RBA statement and recent solid Chinese trade data.
Key Quotes
"The RBA’s one-month-old rhetoric on the currency, that it’s “high” but could “possibl[y]...depreciate further over time” to assist the economy’s “rebalancing” is effectively an easing bias. It carries an implicit threat of more rate cuts should the currency not fall further, over time (emphasis is ours). But for now, the most rapid adjustment phase is most probably over, and we expect AUDUSD to trade within a USD0.88 - 0.92 range over the next few weeks. Our medium-term view on the AUD remains negative."
"Net speculative short positions on the AUD have persisted at extreme levels for the past eight weeks, and in fact stood at a record 72.6k in the week ending July 30. We suspect the RBA communiqué was a catalyst for a departure from this overwhelmingly bearish consensus, though we wouldn’t go as far as predicting a return to net longs just yet."
Key Quotes
"The RBA’s one-month-old rhetoric on the currency, that it’s “high” but could “possibl[y]...depreciate further over time” to assist the economy’s “rebalancing” is effectively an easing bias. It carries an implicit threat of more rate cuts should the currency not fall further, over time (emphasis is ours). But for now, the most rapid adjustment phase is most probably over, and we expect AUDUSD to trade within a USD0.88 - 0.92 range over the next few weeks. Our medium-term view on the AUD remains negative."
"Net speculative short positions on the AUD have persisted at extreme levels for the past eight weeks, and in fact stood at a record 72.6k in the week ending July 30. We suspect the RBA communiqué was a catalyst for a departure from this overwhelmingly bearish consensus, though we wouldn’t go as far as predicting a return to net longs just yet."