2 Jul 2013
Flash: AUD/USD likely to firm after speculated RBA inaction – Westpac
FXstreet.com (New York) - According to Global FX Strategist Sean Callow at Westpac, “Given the likely steady hand from the RBA, some decent domestic data and cooling of China money market fears should help the AUD push a little higher on the week.”
As for the AUD crosses, they will probably outperform, however ultra-short spec positions suggest the AUD/USD firms too, towards 0.9300/50.
In terms of the AU outright, “We are not expecting the RBA to alter the cash rate next week, with the Bank likely to reiterate its easing bias. This should ensure domestic yields continue to follow offshore leads. Finally, over the next 6 months, a 3-10yr flattener for the AU curve will pay off, however in the near-term the curve is likely to remain volatile with the risk-reward skewed towards higher a steeper curve in the near term.” Callow adds.
As for the AUD crosses, they will probably outperform, however ultra-short spec positions suggest the AUD/USD firms too, towards 0.9300/50.
In terms of the AU outright, “We are not expecting the RBA to alter the cash rate next week, with the Bank likely to reiterate its easing bias. This should ensure domestic yields continue to follow offshore leads. Finally, over the next 6 months, a 3-10yr flattener for the AU curve will pay off, however in the near-term the curve is likely to remain volatile with the risk-reward skewed towards higher a steeper curve in the near term.” Callow adds.