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FXstreet.com (Barcelona) - RBS Greg Gibbs, FX Trading Strategist, thinks the RBA will refrain from further rate cuts in Q1, mainly due to a range of positive factors, from "the sharp improvement in iron ore prices, recovery in China data, avoidance of the US fiscal cliff, significant further improvement in European market stability" he notes.

However, Greg expects the run up in iron ore prices to be to a significant extent seasonal restocking; "It has significantly out-paced steel prices and must make China question whether in is really helping China or Australia reinvigorating infrastructure spending. Other commodity prices, including coal have recovered much less" he said.

Mr. Gibbs concludes by saying that "given the weak data recently, and the likelihood that the AUD remains strong into Q2, the RBA may well be cutting further in a few months."
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