4 Mar 2014
Flash: AUD/USD unlikely to advance beyond 0.9000 - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, sees gains above 0.9000 in AUD/USD unlikely to be sustained.
Key Quotes
"After the 10.8% plunge in the Micex Index in Russia yesterday, the equity market is rebounding this morning – currently up nearly 3.0% - as fears over an escalation in the crisis recede. There are unconfirmed reports of a pull-back of Russian troops but whether this relates to Crimea is unclear."
"It appears this relates to troops near the Ukraine border. Improved confidence is also evident in Asia with most equity markets higher on the day."
"Russia and the Ukraine were clearly the focus during the Asian trading session while in Asia itself the RBA central bank meeting was the main event. The RBA once again in its statement indicated a greater degree of comfort with the current monetary stance but did again reiterate its view that the Australian dollar “remains high by historical standards”."
"Stable interest rates was described as the “most prudent” course. With the RBA expecting the unemployment rate to move higher still, there is probably a concern over still fragile domestic conditions that may be worsened by a continued rebound in the AUD/USD rate. A more neutral bias leaves that prospect as a possibility but we doubt levels considerably over 0.9000 would be sustained as it would in all likelihood prompt a shift in bias by the RBA."
Key Quotes
"After the 10.8% plunge in the Micex Index in Russia yesterday, the equity market is rebounding this morning – currently up nearly 3.0% - as fears over an escalation in the crisis recede. There are unconfirmed reports of a pull-back of Russian troops but whether this relates to Crimea is unclear."
"It appears this relates to troops near the Ukraine border. Improved confidence is also evident in Asia with most equity markets higher on the day."
"Russia and the Ukraine were clearly the focus during the Asian trading session while in Asia itself the RBA central bank meeting was the main event. The RBA once again in its statement indicated a greater degree of comfort with the current monetary stance but did again reiterate its view that the Australian dollar “remains high by historical standards”."
"Stable interest rates was described as the “most prudent” course. With the RBA expecting the unemployment rate to move higher still, there is probably a concern over still fragile domestic conditions that may be worsened by a continued rebound in the AUD/USD rate. A more neutral bias leaves that prospect as a possibility but we doubt levels considerably over 0.9000 would be sustained as it would in all likelihood prompt a shift in bias by the RBA."