13 Feb 2015
RBA Gov Steven’s comment doesn’t alter the bearish AUD view – Rabobank
FXStreet (Barcelona) - According to Jane Foley, Senior Currency Strategist at Rabobank, with Australian trade data expected to take a hit due to slowing Chinese imports, and RBA likely to cut interest rates again in this year, AUD/USD bearish move towards 0.70 over 12-months stays intact.
Key Quotes
“Steven’s last night admitted that interest rate policy no longer had as much ability to steer economic growth. However, with the key interest rate still a relatively buoyant 2.25%, the RBA appears to have more in its policy tool box than many other central banks.”
“In our view the RBA is likely to cut interest rates again this year.”
“Chinese trade data for January reported a stunning 19.9% y/y drop in imports reflecting a weakening demand for raw materials. Although last year China continued to absorbing large volumes of Australian iron ore and coal, this has been at a much reduced price.”
“In January Chinese iron ore imports fell 9.5% m/m raising the risk that this year Australian commodities exporters will be feeling the brunt not only of weak prices but of soft volumes also.”
“Lower revenues may feed through into weaker employment levels during the course of the year.”
“We maintain our forecast of AUD/USD0.70 on a 12 mth view.”
Key Quotes
“Steven’s last night admitted that interest rate policy no longer had as much ability to steer economic growth. However, with the key interest rate still a relatively buoyant 2.25%, the RBA appears to have more in its policy tool box than many other central banks.”
“In our view the RBA is likely to cut interest rates again this year.”
“Chinese trade data for January reported a stunning 19.9% y/y drop in imports reflecting a weakening demand for raw materials. Although last year China continued to absorbing large volumes of Australian iron ore and coal, this has been at a much reduced price.”
“In January Chinese iron ore imports fell 9.5% m/m raising the risk that this year Australian commodities exporters will be feeling the brunt not only of weak prices but of soft volumes also.”
“Lower revenues may feed through into weaker employment levels during the course of the year.”
“We maintain our forecast of AUD/USD0.70 on a 12 mth view.”