Forex Flash: AUD/USD has lowest volatility since Feb. 2007 – Westpac

FXstreet.com (Barcelona) - The local Australian calendar highlights the Q3 capex (actual and planned) on Thursday November 29th. According to Sean Callow, a Global Strategist at Westpac, "The RBA will be watching this with interest yet it probably won't be vital for their 4 December decision. This leaves plenty of trading sessions for AUD to chop around on US and European political headlines."

"Moreover, the lowest implied volatility on the AUDUSD since Feb 2007 fits our ongoing neutral bias. The past week's 1.0288 low did at least mark a slight range break but it was short-lived. The topside should be capped around 1.0460/80 as US politicians keep equities nervous though a deal on Greece might help AUD indirectly." Callow adds.

Strong capital inflows to Asia imply support for the AUD on dips towards 1.0290/1.0300, both on what it tells us about investor expectations for Asian growth (reinforced by China Nov flash PMI today) and on diversification of rising USD reserves.