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 less than enamoured with the exchange to-date, too. Note that offshore holding of ACGBs as a percentage of total outstanding runs currently at 74.4%. But where foreigners bought 88% of AUD govvie issuance in 2010, 2011 and into last year, the RBA reports offshore interests absorbed only 9% of issuance in the recent September quarter. Might Aussie fiscal issues loom for the macro set? Is the market satiated with AUD debt? We doubt either factor is at play, surmising that in the yield starved world in which we ply our trade, levitation toward 1.20 may be more probable than a downdraft to 0.90 in the medium- term -- especially if Chinese growth holds in and Tokyo meaningfully beats the BoJ into QE submission"