29 Oct 2015
AUD/USD could test 0.69 if the RBA cut rates – Westpac
FXStreet (Edinburgh) - Strategist Sean Callow at Westpac sees the Aussie dollar testing the 0.69 handle in case the RBA decides to cut rates at its meeting next week.
Key Quotes
“It is hard to make a bullish AUD/USD case near term. The FOMC’s surprisingly firm tone should support US yields and USD near term, notably including USD/Asia”.
“Yet the Fed had no reason to sound an “all clear” on Asian/EM growth so this weight remains. China’s rate cut has been rightly seen as an admission that growth is failing to revive, with hints of more to come”.
“This fits the ongoing pressure on commodity prices, with spot iron ore probing below $50 for the fi rst time since July, -11% this month”.
“If the RBA holds steady in what could be a close call then AUD/USD should trade mostly 0.70-0.72. But a rate cut would open up losses towards Sep’s lows near 0.69”.
Key Quotes
“It is hard to make a bullish AUD/USD case near term. The FOMC’s surprisingly firm tone should support US yields and USD near term, notably including USD/Asia”.
“Yet the Fed had no reason to sound an “all clear” on Asian/EM growth so this weight remains. China’s rate cut has been rightly seen as an admission that growth is failing to revive, with hints of more to come”.
“This fits the ongoing pressure on commodity prices, with spot iron ore probing below $50 for the fi rst time since July, -11% this month”.
“If the RBA holds steady in what could be a close call then AUD/USD should trade mostly 0.70-0.72. But a rate cut would open up losses towards Sep’s lows near 0.69”.