Royal Bank of Scotland - "Global yields are up significantly in recent weeks, except in Japan where the BoJ's aggressive and committed QQE policy is keeping a lid on yields. Consequently, JPY's yield disadvantage is growing and this is likely to see further weakness in JPY. Its near term direction may depend also on degrees of risk aversion and potential for EM market upheaval to drag on investor confidence. But EM and Syria fears are not unduly weakening global equities or generating a…Continue
Added by Francesc Riverola on September 6, 2013 at 9:54am — No Comments
Societé Generale - "Our Technical analysts see a move in AUD/USD to 0.99 or so, even within the context of the longer-term downtrend. In terms of EUR/AUD, a 38.2% retracement of the recent rally would take us down to 1.34 and that seems a reasonable target. 1.4150 is a viable stop above here. On the EUR/USD side, a lot of bearish sentiment in the European economy and in the currency has been flushed out by the last month’s jump in PMIs. That means that a further PMI gain is now priced in and…Continue
Royal Bank of Scotland - "After resisting this slide in the AUD on the basis that the market may have been getting ahead of itself, I am coming to the conclusion that its fall could continue at a rapid clip. global markets are generally more on edge, larger moves are more common place, and the AUD is now moving quickly to price in the end of the resources boom, a slow down in China that may become worse, and a weak Australian economy outside of the resources sector. The economic data this…Continue
Added by Francesc Riverola on June 10, 2013 at 8:48am — No Comments
Brown Brothers and Harriman - "The dramatic sell-off of the Australian dollar is the latest of a series of price developments that have surprised the market. (...) The Australian dollar was the market's darling. It was an accessible even if not perfect way to get exposure to China and its vociferous demand for commodities. It was one of the few triple-A rated countries left standing after the financial crisis. Its interest rates were relatively higher in an environment in which there was a…Continue
Added by Francesc Riverola on May 16, 2013 at 1:55pm — No Comments
UBS - "The Reserve Bank of Australia is likely to keep the cash rate on hold at 3.0% at Tuesday morning's policy decision. That's the view of our Australia economics team, and about two thirds of economists surveyed by Bloomberg agree. The market has a more dovish disposition however, with about half a 25bp cut now priced in. In fact, having become mostly convinced that the RBA had reached the end of its easing cycle only a month ago, the market's 12m easing expectations increased sharply…Continue
Added by Francesc Riverola on May 6, 2013 at 8:41am — No Comments
National Australia Bank - "We issued a short AUD/NZD trade recommendation on March 25th at 1.2525, initially targeting 1.20. We are now taking profit on the trade at 1.2058 but will look to re-enter a short position as early as next Tuesday following the RBA’s rates decision.
The cross has come a long way since March and technical indicators such as the daily RSI suggest the currency is marginally ‘overbought’. What’s more, speculative net long positions are much larger in NZD relative…
Royal Bank of Scotland - "The AUD fell independently of other currencies (although the NZD followed suit) suddenly overnight. This appears related to increased speculation of a rate cut as soon as May. A cut in May has edged up to be 41% priced in and 92% priced in for June. Its fall was also timed with the weaker than expected ADP US employment report and a sudden drop in copper and gold prices.
(...) It seems unlikely that the AUD will collapse, but it seems likely that it will break…
Added by Francesc Riverola on May 2, 2013 at 10:28am — No Comments
Brown Brothers Harriman - "The Australian dollar reached almost $1.06 before the unwinding of cross positions against the yen took a toll (as it appears to have done on the other major currencies as well to varying degrees). Some observers linked the heavier tone of the Aussie before the weekend to the slide in steep slide in gold prices.
While possible, our work shows a very weak correlation between Australian dollar and gold. In fact, on a rolling-60 day basis, using percentage change,…
Added by Francesc Riverola on April 15, 2013 at 9:22am — No Comments
The Australian dollar received a boost after the news services reported comments made by a Reserve Bank of Australia (RBA) Board member during today's London trading session. Economist John Edwards, an economist and member of the RBA board for nearly two years, has stated that the high Aussie does not require a policy response as the economy is dealing with the currency's strength better than…Continue
Added by Curt Wehrley on April 9, 2013 at 12:00pm — No Comments
Westpac - "FX: Strategy Views
Added by Francesc Riverola on March 11, 2013 at 10:55am — No Comments
UBS - "How fast is Australia’s mining investment boom set to recede? And are the non- mining sectors of the economy ready to step into the breach? On Thursday February 28th we should get answers to both questions when the capex survey is published. It is arguably Australia’s most important data release for all of this year and we believe the outcome to be pivotal for the Australian dollar. (...) Beware of downside risks, though − if the survey shows spending intentions closer to A$130 bn…Continue
Added by Francesc Riverola on February 27, 2013 at 2:43pm — No Comments
The Japanese yen is foreseen to regain strength opposite the Australian dollar today after Japanese Prime Minister Shinzo Abe continued to pile pressure on the Bank of Japan to make good on its promise for bolder action to overcome nagging deflation in a speech yesterday. Meanwhile, a marked improvement in Australian business confidence is deemed to support the Aussie today.
In his first policy speech to the parliament since taking power, Japan’s PM Shinzo Abe, vowing to overcome…
Added by Aviv Shapiro on January 29, 2013 at 1:17am — No Comments
Royal Bank of Scotland - "The AUD has ground its way gradually higher over the last three months, this has occurred despite further steady declines in its yield advantage as the RBA has cut cash rates to revisit the 2009 lows, and the market continues to predict further cuts this year, around 50bp of cuts.
(...) The prevailing sentiment is that the strength in the AUD is more permanent, but that it will struggle to rise further, already very expensive in a purchasing power parity sense.…
Added by Francesc Riverola on January 23, 2013 at 4:42pm — No Comments
Added by Francesc Riverola on January 21, 2013 at 5:30pm — No Comments
Royal Bank of Scotland - "One by one the drivers of AUD strength gave way last year, as slowing Chinese growth, falling commodity prices, USD strength and even the narrowing interest rate differential all argued for a lower Aussie. Against this background, the AUD has proven nothing if not resilient, sustained by resource project capital inflows and foreign purchases of AUD bonds. But are these last pillars of support also at risk? The RBA sees mining investment peaking later this year,…Continue
Added by Francesc Riverola on January 9, 2013 at 3:12pm — No Comments
Royal Bank of Scotland - "(AUD) The RBA has cut 175 bp since October 2011 but AUD holds in so firm that news reports have it that several central banks are encouraging the Aussie central bank to intervene rather than cut rates any further. Of course, selling a truckload of AUD would be great for FX Reserve managers around Asia looking, as they forever are, for yieldy AUD supply. The fact that the RBA likely gets a basket worth of loser currencies in return -- USD, JPY -- is why they've been…Continue
Added by Francesc Riverola on January 8, 2013 at 2:21pm — No Comments
Westpac - "FX: The prospect of the Fed boosting QE3 by at least $25bn should weigh on USD this week, though European news flow might help limit USD/Europe losses at least while positioning should constrain the dollar bloc.
Added by Francesc Riverola on December 10, 2012 at 12:30pm — No Comments
Westpac - "AUD/USD has been resilient in the face of RBA easing and soft domestic data and faces few major local hurdles into year end, keeping dips shallow. Further Fed easing should lend support but likely mixed news on commodities and US fiscal policy should keep a lid on the pair, to around 1.04 at year end. The outlook seems more clearly positive for Q1 2013 however, as commodity prices should swing higher on stronger Chinese growth. We target 1.06 by…Continue
Added by Francesc Riverola on December 5, 2012 at 11:04am — No Comments
The release of the retail sales data resulted to the decline of the Australian dollar in yesterday's Asian trading session, as the weak data added to speculations that the Reserve Bank of Australian (RBA) would cut interest rates at its policy meeting today. On the other hand, the Samurai gained as talks to avert the fiscal cliff stalled, causing investors to shun risk and seek refuge from safer assets.
Today, the Aussie is seen to extend losses versus the…
Added by Aviv Shapiro on December 4, 2012 at 2:49am — No Comments
The Japanese yen recovered from its previous losses in yesterday's Asian trading exchanges before the Eurogroup leaders met for a third time to make an attempt in reaching a Greek deal. However, gains of the Yen versus the Australian dollar were curbed by expectations that the Bank of Japan (BOJ) would be pressured to aggressively ease monetary policy after the December election. In today's trades, the AUDJPY pair is set to turn losses to gains, given that an agreement as regards Greece's…Continue
Added by Aviv Shapiro on November 27, 2012 at 6:52am — No Comments