22 Jan 2014
Flash: Australian dollar are shining - BBH
FXstreet.com (Guatemala) - Strategists at Brown Brothers Harriman explained that Australia reported headline CPI that rose 0.8% q/q in Q4 rather than the 0.4% the market expected.
Key Quotes:
“The y/y pace increased to 2.4% from 2.2%. The consensus had looked for a decline to 2.1%. More important from a policy making point of view, the trimmed mean measure (a different way to think about core inflation) rose 0.9% q/q and 2.6% y/y, which represents a 2-year high”.
“The market had previously appeared to have discounted almost a 50% chance of an RBA rate cut in H1 14. The perceived odds have been nearly halved”.
“The Australian dollar shot up quickly on what appears to be mostly short-covering. It ran out of steam near the initial retracement target (~$0.8885) of the slide from the move to almost $0.9100 on January 13 and in front of the 20-day moving average (~$0.8900)”.
“Above here, additional resistance is seen in the $0.8920-60 band. Initial support is pegged in the $0.8820-40 area”.
Key Quotes:
“The y/y pace increased to 2.4% from 2.2%. The consensus had looked for a decline to 2.1%. More important from a policy making point of view, the trimmed mean measure (a different way to think about core inflation) rose 0.9% q/q and 2.6% y/y, which represents a 2-year high”.
“The market had previously appeared to have discounted almost a 50% chance of an RBA rate cut in H1 14. The perceived odds have been nearly halved”.
“The Australian dollar shot up quickly on what appears to be mostly short-covering. It ran out of steam near the initial retracement target (~$0.8885) of the slide from the move to almost $0.9100 on January 13 and in front of the 20-day moving average (~$0.8900)”.
“Above here, additional resistance is seen in the $0.8920-60 band. Initial support is pegged in the $0.8820-40 area”.