Rabobank - "Poor economic data from China and sobering warnings from the mining sector have recently raised questions about the ability of the Australian dollar to retain its firm tone. Despite these doubts, AUD/USD has rallied by 2.5% since the start of the quarter. The performance of AUD/USD, however, gives a misleading view of the relative strength of the AUD. In the same period, the currency has lost ground vs. the SEK, CAD, NOK, NZD and GBP. This explains why the RBA’s effective exchange rate for Australia is off its June high. While Australia and the AUD still retain a number of positive fundamentals, the backdrop has worsened. We would argue that main reason for the recent positive momentum behind AUD/USD is related to broad-based USD weakness. While the softness of the greenback is likely to continue supporting AUD/USD into 2013, we expect that the currency pair will struggle to push back to the year’s highs in the region of AUD/USD1.08."