Forex Flash: AUD/USD break of the 1.0535 area sets up a test of 1.0615 – BBH
Forex pairs in this Article »
AUD/USD
FXstreet.com (Córdoba) - RBA minutes from the August 1 meeting were mostly balanced and do not signal imminent easing, according to the BBH analyst team. "RBA said the strong domestic economy is offsetting the fragile global outlook, but noted that euro zone developments will still be a major driver for AUD ahead".
"It noted that China growth is stabilizing at a more sustainable pace", they say. "The RBA also noted ongoing offshore demand for AUD-denominated assets, adding that SNB reserve management in July included 'some' conversion into AUD".
Using OIS pricing, markets still expect 50 bp of total easing over the next 12 months but this depends in large part on external conditions "as we believe AUD remains vulnerable to the weaker China outlook as well as the euro zone crisis, as the RBA noted", BBH explains. "While it is top performer today, AUD is one of the worst performers over the past week and past month. Break of the $1.0535 area sets up a test of the August high near $1.0615", they add.
"It noted that China growth is stabilizing at a more sustainable pace", they say. "The RBA also noted ongoing offshore demand for AUD-denominated assets, adding that SNB reserve management in July included 'some' conversion into AUD".
Using OIS pricing, markets still expect 50 bp of total easing over the next 12 months but this depends in large part on external conditions "as we believe AUD remains vulnerable to the weaker China outlook as well as the euro zone crisis, as the RBA noted", BBH explains. "While it is top performer today, AUD is one of the worst performers over the past week and past month. Break of the $1.0535 area sets up a test of the August high near $1.0615", they add.
Free Annual Reports
