24 Apr 2014
AUD should not fall further without a catalyst - RBS
FXStreet (Bali) - According to Greg Gibbs, FX Strategist at RBS, despite the lower-than-expected Australian CPI, the RBA is still expected firmly on hold, suggesting that the AUD may need another catalyst to fall further.
Key Quotes
"The Australian CPI was significantly lower than expected in Q1 reported yesterday, but year ended inflation was still a little higher in underlying terms than Q4, and just above the mid of the 2–3% target zone."
"As such, along with the strong housing market and recent evidence that the broader economy is operating close to trend, including stronger employment data in Feb/Mar, the RBA remains firmly on hold."
"As such, the AUD should not fall further without a catalyst, and may begin to grind higher again near term as the market continues to seek carry trades."
Key Quotes
"The Australian CPI was significantly lower than expected in Q1 reported yesterday, but year ended inflation was still a little higher in underlying terms than Q4, and just above the mid of the 2–3% target zone."
"As such, along with the strong housing market and recent evidence that the broader economy is operating close to trend, including stronger employment data in Feb/Mar, the RBA remains firmly on hold."
"As such, the AUD should not fall further without a catalyst, and may begin to grind higher again near term as the market continues to seek carry trades."