Forex Flash: AUD/USD downside limited to 1.0125 – Westpac
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AUD/USD
FXstreet.com (Barcelona) - The RBA statement encouraged selling of AUD versus NZD, EUR, GBP, CAD and others, however the outlook is a little more mixed vs. USD. The Fed's QE3 implies creation of USD $40.0B per month until the job market improves significantly, which takes us at least into Q1 2013, probably quite a bit longer.
According to Global Markets Strategist Sean Callow at Westpac, "A weaker USD is presumed to be one of the ways in which QE3 helps the US economy. Moreover, pricing for the RBA beyond Nov is on the aggressive side, with -34bp for Nov/Dec combined at time of writing."
"We doubt the news flow will be poor enough for the RBA to cut three months in a row. This limits downside on AUDUSD multi-month but in the week ahead, the risks seem to be for a test of 1.0170 then 1.0125." Callow warns.
According to Global Markets Strategist Sean Callow at Westpac, "A weaker USD is presumed to be one of the ways in which QE3 helps the US economy. Moreover, pricing for the RBA beyond Nov is on the aggressive side, with -34bp for Nov/Dec combined at time of writing."
"We doubt the news flow will be poor enough for the RBA to cut three months in a row. This limits downside on AUDUSD multi-month but in the week ahead, the risks seem to be for a test of 1.0170 then 1.0125." Callow warns.
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